Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2020 | Jun. 30, 2019 | |
Entity Information [Line Items] | |||
Entity Central Index Key | 0001770450 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Address, Address Line One | P.O. Box 4505, 201 Merritt 7 | ||
Entity Address, City or Town | Norwalk | ||
Entity Address, State or Province | CT | ||
Entity Address, Postal Zip Code | 06851-1056 | ||
City Area Code | 203 | ||
Local Phone Number | 968-3000 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Registrant Name | XEROX HOLDINGS CORPORATION | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 7,818,052,585 | ||
Entity Common Stock, Shares Outstanding | 212,789,134 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Title of 12(b) Security | Common Stock, $1 par value | ||
Trading Symbol | XRX | ||
Security Exchange Name | NYSE | ||
Entity File Number | 001-39013 | ||
Entity Incorporation, State or Country Code | NY | ||
Entity Tax Identification Number | 83-3933743 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | Document Part of Form 10-K in which Incorporated Xerox Holdings Corporation Notice of 2020 Annual Meeting of Shareholders and Proxy Statement (to be filed no later than 120 days after the close of the fiscal year covered by this report on Form 10-K) III | ||
Xerox Corporation | |||
Entity Information [Line Items] | |||
Entity Central Index Key | 0000108772 | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Registrant Name | XEROX CORPORATION | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity File Number | 001-04471 | ||
Entity Incorporation, State or Country Code | NY | ||
Entity Tax Identification Number | 16-0468020 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Revenues | ||||
Total Revenues | $ 9,066 | $ 9,662 | $ 9,991 | |
Costs and Expenses | ||||
Cost of financing | 131 | 132 | 133 | |
Research, development and engineering expenses | 373 | 397 | 424 | |
Selling, administrative and general expenses | 2,085 | 2,379 | 2,514 | |
Restructuring and related costs | 229 | 157 | 216 | |
Amortization of intangible assets | 45 | 48 | 53 | |
Transaction and related costs, net | 12 | 68 | 9 | |
Other expenses, net | 84 | 271 | 330 | |
Total Costs and Expenses | 8,244 | 9,113 | 9,466 | |
Income before Income Taxes and Equity Income | 822 | 549 | 525 | |
Income tax expense | 179 | 247 | 468 | |
Equity in net income of unconsolidated affiliates | 8 | 8 | 13 | |
Income from Continuing Operations | 651 | 310 | 70 | |
Income from discontinued operations, net of tax | 710 | 64 | 137 | |
Net Income | 1,361 | 374 | 207 | |
Less: Income from continuing operations attributable to noncontrolling interests | 3 | 4 | 4 | |
Less: Income from discontinued operations attributable to noncontrolling interests | 5 | 9 | 8 | |
Net Income Attributable to Xerox Holdings | 1,353 | 361 | 195 | |
Income from continuing operations | 648 | 306 | 66 | |
Income from discontinued operations | $ 705 | $ 55 | $ 129 | |
Basic Earnings per Share: | ||||
Continuing operations (in dollars per share) | $ 2.86 | $ 1.17 | $ 0.20 | |
Discontinued operations (in dollars per share) | 3.17 | 0.23 | 0.51 | |
Total Basic Earnings per Share | 6.03 | 1.40 | 0.71 | |
Diluted Earnings per Share: | ||||
Continuing operations (in dollars per share) | 2.78 | 1.16 | 0.20 | |
Discontinued operations (in dollars per share) | 3.02 | 0.22 | 0.51 | |
Diluted Earnings per Share | $ 5.80 | $ 1.38 | $ 0.71 | |
Sales | ||||
Revenues | ||||
Total Revenues | [1] | $ 3,227 | $ 3,454 | $ 3,412 |
Costs and Expenses | ||||
Cost of goods and services sold | [1] | 2,097 | 2,188 | 2,133 |
Services, maintenance and rentals | ||||
Revenues | ||||
Total Revenues | [1] | 5,595 | 5,940 | 6,285 |
Costs and Expenses | ||||
Cost of goods and services sold | [1] | 3,188 | 3,473 | 3,654 |
Financing | ||||
Revenues | ||||
Total Revenues | 244 | 268 | 294 | |
Xerox Corporation | ||||
Revenues | ||||
Total Revenues | 9,066 | 9,662 | 9,991 | |
Costs and Expenses | ||||
Cost of financing | 131 | 132 | 133 | |
Research, development and engineering expenses | 373 | 397 | 424 | |
Selling, administrative and general expenses | 2,085 | 2,379 | 2,514 | |
Restructuring and related costs | 229 | 157 | 216 | |
Amortization of intangible assets | 45 | 48 | 53 | |
Transaction and related costs, net | 12 | 68 | 9 | |
Other expenses, net | 84 | 271 | 330 | |
Total Costs and Expenses | 8,244 | 9,113 | 9,466 | |
Income before Income Taxes and Equity Income | 822 | 549 | 525 | |
Income tax expense | 179 | 247 | 468 | |
Equity in net income of unconsolidated affiliates | 8 | 8 | 13 | |
Income from Continuing Operations | 651 | 310 | 70 | |
Income from discontinued operations, net of tax | 710 | 64 | 137 | |
Net Income | 1,361 | 374 | 207 | |
Less: Income from continuing operations attributable to noncontrolling interests | 3 | 4 | 4 | |
Less: Income from discontinued operations attributable to noncontrolling interests | 5 | 9 | 8 | |
Net Income Attributable to Xerox Holdings | 1,353 | 361 | 195 | |
Income from continuing operations | 648 | 306 | 66 | |
Income from discontinued operations | 705 | 55 | 129 | |
Xerox Corporation | Sales | ||||
Revenues | ||||
Total Revenues | [2] | 3,227 | 3,454 | 3,412 |
Costs and Expenses | ||||
Cost of goods and services sold | [2] | 2,097 | 2,188 | 2,133 |
Xerox Corporation | Services, maintenance and rentals | ||||
Revenues | ||||
Total Revenues | [2] | 5,595 | 5,940 | 6,285 |
Costs and Expenses | ||||
Cost of goods and services sold | [2] | 3,188 | 3,473 | 3,654 |
Xerox Corporation | Financing | ||||
Revenues | ||||
Total Revenues | $ 244 | $ 268 | $ 294 | |
[1] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information. | |||
[2] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Net Income | $ 1,361 | $ 374 | $ 207 | |
Less: Income from continuing operations attributable to noncontrolling interests | 3 | 4 | 4 | |
Less: Income from discontinued operations attributable to noncontrolling interests | 5 | 9 | 8 | |
Net Income Attributable to Xerox Holdings | 1,353 | 361 | 195 | |
Translation adjustments, net | [1] | 62 | (242) | 483 |
Unrealized (losses) gains, net | [1] | (6) | 16 | 1 |
Changes in defined benefit plans, net | [1] | (10) | 409 | 106 |
Other Comprehensive Income, Net | [1] | 46 | 183 | 590 |
Less: Other comprehensive income, net attributable to noncontrolling interests | [1] | 0 | 0 | 1 |
Other Comprehensive Income, Net Attributable to Xerox Holdings | [1] | 46 | 183 | 589 |
Comprehensive Income, Net | 1,407 | 557 | 797 | |
Less: Comprehensive income, net from continuing operations attributable to noncontrolling interests | 3 | 4 | 5 | |
Less: Comprehensive income, net from discontinued operations attributable to noncontrolling interests | 5 | 9 | 8 | |
Comprehensive Income, Net Attributable to Xerox Holdings | 1,399 | 544 | 784 | |
Xerox Corporation | ||||
Net Income | 1,361 | 374 | 207 | |
Less: Income from continuing operations attributable to noncontrolling interests | 3 | 4 | 4 | |
Less: Income from discontinued operations attributable to noncontrolling interests | 5 | 9 | 8 | |
Net Income Attributable to Xerox Holdings | 1,353 | 361 | 195 | |
Translation adjustments, net | [2] | 62 | (242) | 483 |
Unrealized (losses) gains, net | [2] | (6) | 16 | 1 |
Changes in defined benefit plans, net | [2] | (10) | 409 | 106 |
Other Comprehensive Income, Net | [2] | 46 | 183 | 590 |
Less: Other comprehensive income, net attributable to noncontrolling interests | [2] | 0 | 0 | 1 |
Other Comprehensive Income, Net Attributable to Xerox Holdings | [2] | 46 | 183 | 589 |
Comprehensive Income, Net | 1,407 | 557 | 797 | |
Less: Comprehensive income, net from continuing operations attributable to noncontrolling interests | 3 | 4 | 5 | |
Less: Comprehensive income, net from discontinued operations attributable to noncontrolling interests | 5 | 9 | 8 | |
Comprehensive Income, Net Attributable to Xerox Holdings | $ 1,399 | $ 544 | $ 784 | |
[1] | Refer to Note 25 - Other Comprehensive (Loss) Income for gross components of Other Comprehensive Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects. | |||
[2] | Refer to Note 25 - Other Comprehensive (Loss) Income for gross components of Other Comprehensive Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 2,740 | $ 1,081 |
Accounts receivable, net | 1,236 | 1,270 |
Billed portion of finance receivables, net | 111 | 105 |
Finance receivables, net | 1,158 | 1,218 |
Inventories | 694 | 829 |
Assets of discontinued operations | 0 | 19 |
Other current assets | 201 | 191 |
Total current assets | 6,140 | 4,713 |
Finance receivables due after one year, net | 2,082 | 2,149 |
Equipment on operating leases, net | 364 | 442 |
Land, buildings and equipment, net | 426 | |
Land, buildings and equipment, net | 498 | |
Intangible assets, net | 199 | 220 |
Goodwill | 3,900 | 3,858 |
Deferred tax assets | 598 | 740 |
Assets of discontinued operations | 0 | 1,352 |
Other long-term assets | 1,338 | 902 |
Total Assets | 15,047 | 14,874 |
Liabilities and Equity | ||
Short-term debt and current portion of long-term debt | 1,049 | 961 |
Accounts payable | 1,053 | 1,073 |
Accrued compensation and benefits costs | 349 | 348 |
Liabilities of discontinued operations | 0 | 21 |
Accrued expenses and other current liabilities | 984 | 848 |
Total current liabilities | 3,435 | 3,251 |
Long-term debt | 3,233 | 4,269 |
Pension and other benefit liabilities | 1,707 | 1,482 |
Post-retirement medical benefits | 352 | 350 |
Other long-term liabilities | 512 | 269 |
Total Liabilities | 9,239 | 9,621 |
Commitments and Contingencies (See Note 21) | ||
Convertible Preferred Stock | 214 | 214 |
Common stock | 215 | 232 |
Additional paid-in capital | 2,782 | 3,321 |
Treasury stock, at cost | (76) | (55) |
Retained earnings | 6,312 | 5,072 |
Accumulated other comprehensive loss | (3,646) | (3,565) |
Xerox Holdings/Xerox shareholders’ equity | 5,587 | 5,005 |
Noncontrolling interests | 7 | 34 |
Total Equity | 5,594 | 5,039 |
Total Liabilities and Equity | $ 15,047 | $ 14,874 |
Common stock issued (shares) | 214,621,000 | 231,690,000 |
Treasure stock (shares) | (2,031,000) | (2,067,000) |
Common stock outstanding (shares) | 212,590,000 | 229,623,000 |
Xerox Corporation | ||
Assets | ||
Cash and cash equivalents | $ 2,740 | $ 1,081 |
Accounts receivable, net | 1,236 | 1,270 |
Billed portion of finance receivables, net | 111 | 105 |
Finance receivables, net | 1,158 | 1,218 |
Inventories | 694 | 829 |
Assets of discontinued operations | 0 | 19 |
Other current assets | 201 | 191 |
Total current assets | 6,140 | 4,713 |
Finance receivables due after one year, net | 2,082 | 2,149 |
Equipment on operating leases, net | 364 | 442 |
Land, buildings and equipment, net | 426 | |
Land, buildings and equipment, net | 498 | |
Intangible assets, net | 199 | 220 |
Goodwill | 3,900 | 3,858 |
Deferred tax assets | 598 | 740 |
Assets of discontinued operations | 0 | 1,352 |
Other long-term assets | 1,338 | 902 |
Total Assets | 15,047 | 14,874 |
Liabilities and Equity | ||
Short-term debt and current portion of long-term debt | 1,049 | 961 |
Accounts payable | 1,053 | 1,073 |
Accrued compensation and benefits costs | 349 | 348 |
Liabilities of discontinued operations | 0 | 21 |
Accrued expenses and other current liabilities | 918 | 848 |
Total current liabilities | 3,369 | 3,251 |
Long-term debt | 3,233 | 4,269 |
Pension and other benefit liabilities | 1,707 | 1,482 |
Post-retirement medical benefits | 352 | 350 |
Other long-term liabilities | 512 | 269 |
Total Liabilities | 9,173 | 9,621 |
Commitments and Contingencies (See Note 21) | ||
Convertible Preferred Stock | 0 | 214 |
Common stock | 0 | 232 |
Additional paid-in capital | 3,266 | 3,321 |
Treasury stock, at cost | 0 | (55) |
Retained earnings | 6,247 | 5,072 |
Accumulated other comprehensive loss | (3,646) | (3,565) |
Xerox Holdings/Xerox shareholders’ equity | 5,867 | 5,005 |
Noncontrolling interests | 7 | 34 |
Total Equity | 5,874 | 5,039 |
Total Liabilities and Equity | $ 15,047 | $ 14,874 |
Common stock issued (shares) | 100,000 | |
Common stock outstanding (shares) | 100,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows from Operating Activities | |||
Net income | $ 1,361 | $ 374 | $ 207 |
Income from discontinued operations, net of tax | (710) | (64) | (137) |
Income from continuing operations | 651 | 310 | 70 |
Adjustments required to reconcile Net income to Cash flows from operating activities | |||
Depreciation and amortization | 430 | 526 | 527 |
Provisions | 73 | 70 | 73 |
Deferred tax expense | 124 | 135 | 399 |
Net gain on sales of businesses and assets | (21) | (35) | (15) |
Stock-based compensation | 50 | 57 | 52 |
Restructuring and asset impairment charges | 127 | 156 | 197 |
Payments for restructurings | (93) | (169) | (220) |
Defined benefit pension cost | 109 | 175 | 194 |
Contributions to defined benefit pension plans | (141) | (144) | (836) |
Decrease (increase) in accounts receivable and billed portion of finance receivables | 10 | 31 | (531) |
Decrease (increase) in inventories | 109 | 17 | (73) |
Increase in equipment on operating leases | (153) | (248) | (217) |
Decrease in finance receivables | 101 | 166 | 162 |
(Increase) decrease in other current and long-term assets | (14) | 29 | (20) |
(Decrease) increase in accounts payable | (47) | 1 | 1 |
Decrease in accrued compensation | (94) | (111) | (28) |
Increase (decrease) in other current and long-term liabilities | 40 | 52 | (79) |
Net change in income tax assets and liabilities | (34) | 41 | 11 |
Net change in derivative assets and liabilities | 11 | (14) | 75 |
Other operating, net | 6 | 37 | 9 |
Net cash provided by (used in) operating activities of continuing operations | 1,244 | 1,082 | (249) |
Net cash provided by (used in) operating activities of discontinued operations | 89 | 58 | (18) |
Net cash provided by (used in) operating activities | 1,333 | 1,140 | (267) |
Cash Flows from Investing Activities | |||
Cost of additions to land, buildings, equipment and software | (65) | (90) | (105) |
Proceeds from sales of businesses and assets | 21 | 59 | 23 |
Acquisitions, net of cash acquired | (42) | 0 | (87) |
Collections of deferred proceeds from sales of receivables | 0 | 0 | 213 |
Collections on beneficial interest from sales of finance receivables | 0 | 0 | 21 |
Other investing, net | 1 | 2 | 100 |
Net cash (used in) provided by investing activities of continuing operations | (85) | (29) | 165 |
Net cash provided by investing activities of discontinued operations | 2,233 | 0 | 0 |
Net cash provided by (used in) investing activities | 2,148 | (29) | 165 |
Cash Flows from Financing Activities | |||
Net (payments) proceeds on short-term debt | 0 | (5) | 2 |
Proceeds from issuance of long-term debt | 10 | 9 | 1,008 |
Payments on long-term debt | (960) | (311) | (1,832) |
Dividends | (243) | (269) | (291) |
Payments to acquire treasury stock, including fees | (600) | (700) | 0 |
Other financing, net | (41) | (25) | 128 |
Net cash used in financing activities | (1,834) | (1,301) | (985) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | (30) | 53 |
Increase (decrease) in cash, cash equivalents and restricted cash | 1,647 | (220) | (1,034) |
Cash, cash equivalents and restricted cash at beginning of year | 1,148 | 1,368 | 2,402 |
Cash, Cash Equivalents and Restricted Cash at End of Year | 2,795 | 1,148 | 1,368 |
Xerox Corporation | |||
Cash Flows from Operating Activities | |||
Net income | 1,361 | 374 | 207 |
Income from discontinued operations, net of tax | (710) | (64) | (137) |
Income from continuing operations | 651 | 310 | 70 |
Adjustments required to reconcile Net income to Cash flows from operating activities | |||
Depreciation and amortization | 430 | 526 | 527 |
Provisions | 73 | 70 | 73 |
Deferred tax expense | 124 | 135 | 399 |
Net gain on sales of businesses and assets | (21) | (35) | (15) |
Stock-based compensation | 50 | 57 | 52 |
Restructuring and asset impairment charges | 127 | 156 | 197 |
Payments for restructurings | (93) | (169) | (220) |
Defined benefit pension cost | 109 | 175 | 194 |
Contributions to defined benefit pension plans | (141) | (144) | (836) |
Decrease (increase) in accounts receivable and billed portion of finance receivables | 10 | 31 | (531) |
Decrease (increase) in inventories | 109 | 17 | (73) |
Increase in equipment on operating leases | (153) | (248) | (217) |
Decrease in finance receivables | 101 | 166 | 162 |
(Increase) decrease in other current and long-term assets | (14) | 29 | (20) |
(Decrease) increase in accounts payable | (47) | 1 | 1 |
Decrease in accrued compensation | (94) | (111) | (28) |
Increase (decrease) in other current and long-term liabilities | 40 | 52 | (79) |
Net change in income tax assets and liabilities | (34) | 41 | 11 |
Net change in derivative assets and liabilities | 11 | (14) | 75 |
Other operating, net | 6 | 37 | 9 |
Net cash provided by (used in) operating activities of continuing operations | 1,244 | 1,082 | (249) |
Net cash provided by (used in) operating activities of discontinued operations | 89 | 58 | (18) |
Net cash provided by (used in) operating activities | 1,333 | 1,140 | (267) |
Cash Flows from Investing Activities | |||
Cost of additions to land, buildings, equipment and software | (65) | (90) | (105) |
Proceeds from sales of businesses and assets | 21 | 59 | 23 |
Acquisitions, net of cash acquired | (42) | 0 | (87) |
Collections of deferred proceeds from sales of receivables | 0 | 0 | 213 |
Collections on beneficial interest from sales of finance receivables | 0 | 0 | 21 |
Other investing, net | 1 | 2 | 100 |
Net cash (used in) provided by investing activities of continuing operations | (85) | (29) | 165 |
Net cash provided by investing activities of discontinued operations | 2,233 | 0 | 0 |
Net cash provided by (used in) investing activities | 2,148 | (29) | 165 |
Cash Flows from Financing Activities | |||
Net (payments) proceeds on short-term debt | 0 | (5) | 2 |
Proceeds from issuance of long-term debt | 10 | 9 | 1,008 |
Payments on long-term debt | (960) | (311) | (1,832) |
Dividends | (181) | (269) | (291) |
Payments to acquire treasury stock, including fees | (300) | (700) | 0 |
Distributions to parent | (373) | 0 | 0 |
Other financing, net | (30) | (25) | 128 |
Net cash used in financing activities | (1,834) | (1,301) | (985) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | (30) | 53 |
Increase (decrease) in cash, cash equivalents and restricted cash | 1,647 | (220) | (1,034) |
Cash, cash equivalents and restricted cash at beginning of year | 1,148 | 1,368 | 2,402 |
Cash, Cash Equivalents and Restricted Cash at End of Year | $ 2,795 | $ 1,148 | $ 1,368 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Total | Xerox Holdings Shareholders' Equity | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | AOCL | Noncontrolling Interests | Xerox Corporation | Xerox CorporationXerox Holdings Shareholders' Equity | Xerox CorporationCommon Stock | Xerox CorporationAdditional Paid-in Capital | Xerox CorporationTreasury Stock | Xerox CorporationRetained Earnings | Xerox CorporationAOCL | [1] | Xerox CorporationNoncontrolling Interests | |||||||||
Beginning Balance at Dec. 31, 2016 | $ 4,709 | $ 254 | $ 3,858 | $ 0 | $ 4,934 | $ (4,337) | [1] | $ 4,709 | $ 254 | $ 3,858 | $ 0 | $ 4,934 | $ (4,337) | |||||||||||||
Noncontrolling Interests Beginning Balance at Dec. 31, 2016 | $ 38 | $ 38 | ||||||||||||||||||||||||
Total Equity Beginning Balance at Dec. 31, 2016 | $ 4,747 | $ 4,747 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Comprehensive income (loss), net attributable to Xerox Holding/Xerox | 784 | 784 | 195 | 589 | [1] | 784 | 784 | 195 | 589 | |||||||||||||||||
Comprehensive income (loss), net attributable to noncontrolling interest | 13 | 13 | ||||||||||||||||||||||||
Comprehensive income, net | 797 | 797 | ||||||||||||||||||||||||
Cash dividends declared-common | [2] | (259) | (259) | (259) | (259) | (259) | (259) | |||||||||||||||||||
Cash dividends declared-preferred | [3] | (14) | (14) | (14) | (14) | (14) | (14) | |||||||||||||||||||
Stock option and incentive plans, net | 37 | 37 | 1 | 36 | 37 | 37 | 1 | 36 | ||||||||||||||||||
Distributions to noncontrolling interests | (15) | (1) | (1) | (14) | (15) | (1) | (1) | (14) | ||||||||||||||||||
Ending Balance at Dec. 31, 2017 | 5,256 | 255 | 3,893 | 0 | 4,856 | (3,748) | [1] | 5,256 | 255 | 3,893 | 0 | 4,856 | (3,748) | |||||||||||||
Noncontrolling Interests Ending Balance at Dec. 31, 2017 | 37 | 37 | ||||||||||||||||||||||||
Total Equity Ending Balance at Dec. 31, 2017 | $ 5,293 | 5,293 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Dividends per common share (in dollars per share) | $ 1 | |||||||||||||||||||||||||
Dividends per preferred share (in dollars per share) | $ 80 | |||||||||||||||||||||||||
Cumulative effect of change in accounting principles | $ 120 | 120 | 120 | [4] | 120 | 120 | 120 | [4] | ||||||||||||||||||
Cumulative effect of change in accounting principles | Accounting Standards Update 2014-09 | [4] | 117 | 117 | |||||||||||||||||||||||
Cumulative effect of change in accounting principles | Accounting Standards Update 2016-01 | [4] | 3 | 3 | |||||||||||||||||||||||
Comprehensive income (loss), net attributable to Xerox Holding/Xerox | 544 | 544 | 361 | 183 | [1] | 544 | 544 | 361 | 183 | |||||||||||||||||
Comprehensive income (loss), net attributable to noncontrolling interest | 13 | 13 | ||||||||||||||||||||||||
Comprehensive income, net | 557 | 557 | ||||||||||||||||||||||||
Cash dividends declared-common | (251) | (251) | (251) | [2] | (251) | [2] | (251) | [2] | (251) | [2] | ||||||||||||||||
Cash dividends declared-preferred | (14) | (14) | (14) | [3] | (14) | [3] | (14) | [3] | (14) | [3] | ||||||||||||||||
Stock option and incentive plans, net | 50 | 50 | 1 | 49 | 50 | 50 | 1 | 49 | ||||||||||||||||||
Payments to acquire treasury stock, including fees | (700) | (700) | (700) | (700) | (700) | (700) | ||||||||||||||||||||
Cancellation of treasury stock | 0 | (24) | (621) | 645 | 0 | (24) | (621) | 645 | ||||||||||||||||||
Distributions to noncontrolling interests | (16) | (16) | (16) | (16) | ||||||||||||||||||||||
Ending Balance at Dec. 31, 2018 | 5,005 | 5,005 | 232 | 3,321 | (55) | 5,072 | (3,565) | 5,005 | 5,005 | 232 | 3,321 | (55) | 5,072 | (3,565) | ||||||||||||
Noncontrolling Interests Ending Balance at Dec. 31, 2018 | 34 | 34 | 34 | 34 | ||||||||||||||||||||||
Total Equity Ending Balance at Dec. 31, 2018 | $ 5,039 | 5,039 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Dividends per common share (in dollars per share) | $ 1 | |||||||||||||||||||||||||
Dividends per preferred share (in dollars per share) | $ 80 | |||||||||||||||||||||||||
Cumulative effect of change in accounting principles | [5] | $ 0 | 127 | [4] | (127) | [1],[4] | 0 | 127 | [4] | (127) | [4] | |||||||||||||||
Comprehensive income (loss), net attributable to Xerox Holding/Xerox | 1,399 | 1,399 | 1,353 | 46 | [1] | 1,399 | 1,399 | 1,353 | 46 | |||||||||||||||||
Comprehensive income (loss), net attributable to noncontrolling interest | 8 | 8 | ||||||||||||||||||||||||
Comprehensive income, net | 1,407 | 1,407 | ||||||||||||||||||||||||
Cash dividends declared-common | (226) | (226) | (226) | [2] | (115) | (115) | (115) | [2] | ||||||||||||||||||
Cash dividends declared-preferred | (14) | (14) | (14) | [3] | (7) | (7) | (7) | [3] | ||||||||||||||||||
Dividends declared to parent | (183) | (183) | (183) | [3] | ||||||||||||||||||||||
Transfers (to) from parent | (175) | (175) | (175) | |||||||||||||||||||||||
Stock option and incentive plans, net | 23 | 23 | 1 | 22 | 18 | 18 | 0 | 18 | ||||||||||||||||||
Payments to acquire treasury stock, including fees | (600) | (600) | (600) | (300) | (300) | (300) | ||||||||||||||||||||
Cancellation of treasury stock | 0 | (18) | (561) | 579 | 0 | (11) | (344) | 355 | ||||||||||||||||||
Distributions to noncontrolling interests | (3) | (3) | (3) | (3) | ||||||||||||||||||||||
Reorganization | 225 | 225 | (221) | 446 | ||||||||||||||||||||||
Divestiture | (32) | [6] | (32) | [6] | (32) | [7] | (32) | [7] | ||||||||||||||||||
Ending Balance at Dec. 31, 2019 | 5,587 | $ 5,587 | $ 215 | $ 2,782 | $ (76) | $ 6,312 | $ (3,646) | 5,867 | $ 5,867 | $ 0 | $ 3,266 | $ 0 | $ 6,247 | $ (3,646) | ||||||||||||
Noncontrolling Interests Ending Balance at Dec. 31, 2019 | 7 | $ 7 | 7 | $ 7 | ||||||||||||||||||||||
Total Equity Ending Balance at Dec. 31, 2019 | $ 5,594 | $ 5,874 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||
Dividends per common share (in dollars per share) | $ 1 | |||||||||||||||||||||||||
Dividends per preferred share (in dollars per share) | $ 80 | |||||||||||||||||||||||||
[1] | AOCL - Accumulated other comprehensive loss. | |||||||||||||||||||||||||
[2] | Cash dividends declared on common stock for 2019 , 2018 and 2017 were $0.25 per share on a quarterly basis and $1.00 per share on an annual basis. | |||||||||||||||||||||||||
[3] | Cash dividends declared on preferred stock for 2019 , 2018 and 2017 were $20 per share on a quarterly basis and $80 per share on an annual basis. | |||||||||||||||||||||||||
[4] | Includes $117 related to the adoption of the Revenue Recognition Standard ASU 2014-09 - Revenue from Contracts with Customers (ASC Topic 606), see Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, and $3 related to our share of Fuji Xerox's adoption of ASU 2016-01 - Financial Instruments - Classification and Measurement. | |||||||||||||||||||||||||
[5] | Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Income Taxes for additional information related to the adoption of ASU 2018-02. | |||||||||||||||||||||||||
[6] | Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 7 - Divestitures for additional information regarding divestitures. | |||||||||||||||||||||||||
[7] | Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 7 - Divestitures for additional information regarding divestitures. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||||
Dividends per common share (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.28 | $ 1 | $ 1 | $ 1 |
Dividends per preferred share (in dollars per share) | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 | $ 80 | $ 80 | $ 80 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies References to “Xerox Holdings” refer to Xerox Holdings Corporation and its consolidated subsidiaries while references to “Xerox” refer to Xerox Corporation and its consolidated subsidiaries. References herein to “we,” “us,” “our,” the “Company” refer collectively to both Xerox Holdings and Xerox unless the context suggests otherwise. The accompanying Consolidated Financial Statements and footnotes represent the respective consolidated results and financial results of Xerox Holdings and Xerox and all respective companies that each registrant directly or indirectly controls, either through majority ownership or otherwise. This is a combined report of Xerox Holdings and Xerox, which includes separate Consolidated Financial Statements for each registrant. The accompanying Consolidated Financial Statements of both Xerox Holdings and Xerox have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Notes to the Consolidated Financial Statements reflect the activity for both Xerox Holdings and Xerox for all periods presented, unless otherwise noted. Corporate Reorganization On March 6, 2019, the Xerox Board of Directors approved a reorganization (the “Reorganization”) of the Company's corporate structure into a holding company structure. The Reorganization was subject to the approval of shareholders, which was obtained at the annual shareholders meeting held May 21, 2019. On July 31, 2019, Xerox completed the Reorganization, pursuant to which Xerox (the predecessor publicly held parent company) became a direct, wholly-owned subsidiary of Xerox Holdings, the successor public company. The business operations, directors and executive officers of the Company did not change as a result of the Reorganization. In this Reorganization, shareholders of Xerox became shareholders of Xerox Holdings on a one -for-one basis; maintaining the same number of shares and ownership percentage as held in Xerox immediately prior to the Reorganization. In addition, the individual holder of the shares of Xerox’s Series B Preferred Stock exchanged those shares for the same number of shares of Xerox Holdings Series A Preferred Stock. Each share of Xerox Holdings Series A Preferred Stock has the same designations, rights, powers and preferences, and the same qualifications, limitations and restrictions as the shares of Xerox Series B Preferred Stock, with the addition of certain voting rights (Refer to Note 22 - Preferred Stock for additional information regarding the Xerox Holdings Series A Preferred Stock). In connection with the Reorganization, Xerox Holdings assumed each of the Xerox stock plans, all unexercised and unexpired options to purchase Xerox common stock and each right to acquire or vest in a share of Xerox common stock, including restricted stock unit awards, performance share awards and deferred stock units that are outstanding under the Xerox stock plans. In addition, Xerox Holdings became a guarantor of Xerox’s existing Credit Facility. The Reorganization was accounted for as a transaction among entities under common control and is expected to be a tax-free transaction for U.S. federal income tax purposes. Shares of Xerox Holdings common stock trade on the New York Stock Exchange under the ticker symbol “XRX”, formerly used by Xerox. Subsequent to the Reorganization, Xerox Holdings contributed the Xerox Series B Preferred Stock it held to Xerox in exchange for additional capital and Xerox subsequently extinguished the Series B Preferred Stock. The contribution and extinguishment were recorded at carrying value (Refer to Note 22 - Preferred Stock for additional information). In addition, the capital structure of Xerox was modified such that its issued and outstanding common shares now held by Xerox Holdings were exchanged for 100 shares of Xerox $1 par value common stock. Accordingly, we reclassified approximately $221 from Xerox’s Common stock to Additional paid-in capital. Description of Business Currently, Xerox Holdings' sole direct operating subsidiary is Xerox and therefore Xerox reflects the entirety of Xerox Holdings' operations. Xerox is a global enterprise for document management solutions. We provide advanced document technology, services, software and genuine Xerox supplies for a range of customers including small and mid-size businesses, large enterprises, governments and graphic communications providers, and for our partners who serve them. We operate in approximately 160 countries worldwide. Basis of Consolidation The Consolidated Financial Statements include the accounts of Xerox Corporation and all of our controlled subsidiary companies. All significant intercompany accounts and transactions have been eliminated. Investments in business entities in which we do not have control, but we have the ability to exercise significant influence over operating and financial policies (generally 20% to 50% ownership) are accounted for using the equity method of accounting. Operating results of acquired businesses are included in the Consolidated Statements of Income from the date of acquisition. We consolidate variable interest entities if we are deemed to be the primary beneficiary of the entity. Operating results for variable interest entities in which we are determined to be the primary beneficiary are included in the Consolidated Statements of Income from the date such determination is made. For convenience and ease of reference, we refer to the financial statement caption “Income before Income Taxes and Equity Income” as “pre-tax income” throughout the Notes to the Consolidated Financial Statements. Discontinued Operations In November 2019, Xerox Holdings completed a series of transactions to restructure its relationship with FUJIFILM Holdings Corporation (“FH”), including the sale of its indirect 25% equity interest in Fuji Xerox (FX) as well as the sale of its indirect 51% partnership interest in Xerox International Partners (XIP) (collectively the “Sales”). As a result of the Sales of FX and XIP and the related strategic shift in our business the historical financial results of our equity method investment in FX and our XIP business (which was consolidated) for the periods prior to the Sales are reflected as a discontinued operation and as such, their impact is excluded from continuing operations for all periods presented. The accompanying Notes to the Consolidated Financial Statements have all been revised to reflect the effect of the Sales and all prior year balances have been revised accordingly to reflect continuing operations only. The historical statements of Comprehensive Income and Shareholders' Equity have not been revised to reflect the Sales and instead reflect the Sales as an adjustment to the balances at December 31, 2019. Refer to Note 7 - Divestitures for additional information regarding discontinued operations and other divestitures. Prior Period Adjustments In 2018, we determined that the Projected Benefit Obligation (PBO) for our UK funded pension plan at December 31, 2017 was overstated by approximately GBP 40 million (approximately USD $53 or $43 after-tax). The error was the result of the plan administrator under-reporting benefit payments. The correction of the PBO was recorded as an out-of-period adjustment in 2018 with the offset to the balance sheet recorded as a credit to Changes in defined benefit plans, net in Other comprehensive income for the period. We assessed the impact of this error and concluded that it was not material to the financial statements previously issued for any interim or annual period and the correction was not material to the annual financial statements for 2018. Change in Presentation During first quarter 2019, we realigned portions of our business to support our new revenue strategy. This realignment included the combination and consolidation of certain sales units to better service customers consistently across the company. In connection with that realignment, we changed the classification of revenues and related costs from certain service arrangements to consistently conform the presentation of those amounts among our various business units. Prior year amounts were also revised as follows to conform to the 2019 presentation. Year Ended December 31, 2018 As Reported (1) Change As Revised Sales $ 3,805 $ (351 ) $ 3,454 Services, maintenance and rentals 5,589 351 5,940 Cost of sales $ 2,305 $ (117 ) $ 2,188 Cost of services, maintenance and rentals 3,356 117 3,473 Year Ended December 31, 2017 As Reported (1) Change As Revised Sales $ 3,801 $ (389 ) $ 3,412 Services, maintenance and rentals 5,896 389 6,285 Cost of sales $ 2,273 $ (140 ) $ 2,133 Cost of services, maintenance and rentals 3,514 140 3,654 _____________ (1) As reported amounts have been restated to reflect the sale of our investment of XIP. Refer to Note 7 - Divestitures for additional information. The revised presentation does not impact Total Revenues, Total Costs and Expenses or Net Income. Use of Estimates The preparation of our Consolidated Financial Statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our Consolidated Financial Statements will change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. Our estimates are based on management's best available information including current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. Changes in Estimates In the ordinary course of accounting for the items discussed above, we make changes in estimates as appropriate and as we become aware of new or revised circumstances surrounding those estimates. Such changes and refinements in estimation methodologies are reflected in reported results of operations in the period in which the changes are made and, if material, their effects are disclosed in the Notes to the Consolidated Financial Statements and in Management's Discussion and Analysis of Financial Condition and Results of Operations. New Accounting Standards and Accounting Changes Except for the Accounting Standard Updates (ASUs) discussed below, the new ASUs issued by the FASB during the last two years did not have any significant impact on the Company. Accounting Standard Updates to be Adopted: Financial Instruments - Credit Losses and Derivatives In June 2016, the FASB issued ASU 2016-13 , Financial Instruments Credit Losses - Measurement of Credit Losses on Financial Instruments, with additional amendments being issued in 2018 and 2019. This update requires measurement and recognition of expected credit losses for financial assets on an expected loss model rather than an incurred loss model. The update impacts financial assets including net investment in leases that are not accounted for at fair value through Net Income. This update is effective for our fiscal year beginning January 1, 2020. The impact of the adoption of ASU 2016-13 is expected to primarily impact the estimation of our Allowance for doubtful accounts for Accounts Receivables and Finance Receivables. We currently do not expect the new guidance to have a material impact on our financial condition, results of operations or cash flows since we already apply an expected loss model in the estimation of our Allowance for doubtful accounts for Accounts Receivables and Finance Receivables and currently include assessment of current economic conditions. However, the full impact of this standard will be dependent on future economic conditions. Intangibles - Internal-Use Software In August 2018, the FASB issued ASU 2018-15 , Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The update provides criteria for determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The update also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. This update is effective for our fiscal year beginning January 1, 2020. Since we currently capitalize these implementation costs and such amounts are not material, we do not expect the new guidance to have a material impact on our financial condition, results of operations or cash flows. Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This update is effective for our fiscal year beginning January 1, 2021. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements. Accounting Standard Updates Recently Adopted: Leases On January 1, 2019, we adopted ASU 2016-02 , Leases (ASC Topic 842). This update, as well as additional amendments and targeted improvements issued in 2018 and early 2019, supersedes existing lease accounting guidance found under ASC 840, Leases (“ASC 840”) and requires the recognition of right-to-use assets and lease obligations by lessees for those leases originally classified as operating leases under prior lease guidance. Effective with the adoption, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. Short-term leases with a term of 12 months or less are not required to be recognized. The update also requires qualitative and quantitative disclosure of key information regarding the amount, timing and uncertainty of cash flows arising from leasing arrangements to increase transparency and comparability among companies. The accounting for lessors does not fundamentally change with this update except for changes to conform and align guidance to the lessee guidance, as well as to the revenue recognition guidance in ASU 2014-09. Some of these conforming changes, such as those related to the definition of lease term and minimum lease payments, resulted in certain lease arrangements, that would have been previously accounted for as operating leases, to be classified and accounted for as sales-type leases with a corresponding up-front recognition of equipment sales revenue. Upon adoption, we applied the transition option, whereby prior comparative periods are not retrospectively presented in the Consolidated Financial Statements. We also elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components for certain asset classes (real estate lease arrangements for offices and warehouses). Additionally, we made a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes. We elected the package of practical expedients from both the Lessee and Lessor prospective, to the extent applicable. Lessee accounting - the adoption of this update resulted in an increase to assets and related liabilities of approximately $385 (approximately $440 undiscounted) primarily related to leases of facilities. Refer to Note 2 - Adoption of New Leasing Standard - Lessee for additional information related to our lessee accounting. Lessor accounting - the adoption of this update resulted in an increase to equipment sales by approximately $30 in 2019 as compared to 2018. Refer to Note 3 - Adoption of New Leasing Standard - Lessor for additional information related to our lessor accounting. Financial Instruments - Derivatives In August 2017, the FASB issued ASU 2017-12 , Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, with additional updates and amendments being issued in 2018 and 2019 . The amendments in this update expand and refine hedge accounting for both financial and non-financial risk components, align the recognition and presentation of the effects of hedging instruments with the same income statement line item that the hedged item is reported and include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. We adopted ASU 2017-12 effective for our fiscal year beginning January 1, 2019, and it did not have a material impact on our financial condition, results of operations or cash flows. Income Taxes In February 2018, the FASB issued ASU 2018-02 , Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . We adopted ASU 2018-02 effective for our fiscal year beginning January 1, 2019 and upon adoption reclassified $127 from Accumulated other comprehensive loss (AOCL) to Retained earnings related to the stranded tax effects resulting from the Tax Cuts and Jobs Act (Tax Act) enacted in December 2017. The reclassification was primarily related to the stranded tax effects associated with amounts in AOCL from our retirement-related benefit plans. Accordingly, the adoption of this update eliminated the stranded tax effects resulting from the Tax Act. However, because the update only relates to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in Income from continuing operations is not affected. Revenue Recognition On January 1, 2018, we adopted ASU 2014-09 , Revenue from Contracts with Customers (ASC Topic 606), which superseded nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASC Topic 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC Topic 606 defines a five-step process to recognize revenue and requires more judgment and estimates within the revenue recognition process than required under previous U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. We adopted this standard using the modified retrospective method of adoption and therefore we did not revise periods prior to adoption (e.g. 2017). Under ASC Topic 606, based on the nature of our contracts and consistent with prior practice, we recognize revenue upon invoicing the customer for the large majority of our revenue. Additionally, the unit of accounting, that is, the identification of performance obligations, is consistent with prior revenue recognition practice. Accordingly, the adoption of this standard did not have a material impact for the large majority of our revenues. A significant portion of our Equipment sales are either recorded as sales-type leases or through direct sales to distributors and resellers and these revenue streams are not impacted by the adoption of ASC Topic 606. The only change of significance identified in our adoption involves a change in the classification of certain revenues that were previously reported in Services revenues. These revenues relate to certain analyst services performed in connection with the installation of equipment that are being considered part of the equipment sale performance obligation effective beginning January 1, 2018. Accordingly, these revenues are now reported as part of Sales. For the year ended December 31, 2017, we reported $44 as Services, which would have been reported as Sales under the new standard. Another change identified upon adoption was with respect to deferred contract costs, which include incremental costs of obtaining a contract and costs to fulfill a contract. Deferred contract costs had been minimal under our prior practices as most costs to obtain a contract and fulfill a contract were expensed as incurred. However, as a result of the contract cost guidance included in ASC Topic 606 and ASC Topic 340-40 " Contracts with Customers ", upon adoption on January 1, 2018, we recorded a transition asset of $153 , and a net of tax increase of $117 to Retained earnings, related to the incremental cost to obtain contracts. Substantially all of this adjustment is related to the deferral of sales commissions paid to sales people and agents in connection with the placement of equipment with post sale service arrangements. The impact to the Statement of Income from this change is not material. Other Updates The FASB also issued the following Accounting Standards Updates, which have not had, and are not expected to have, a material impact on our financial condition, results of operations or cash flows upon adoption. Those updates are as follows: • Investments: ASU 2020-01 , Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) . This update is effective for our fiscal year beginning January 1, 2021. • Compensation - Stock Compensation and Revenue from Contracts with Customers: ASU 2019-08 , (Topic 718) and (Topic 606) Codification Improvements - Share-Based Consideration Payable to a Customer. This update is effective for our fiscal year beginning January 1, 2020. • Collaborative Arrangements: ASU 2018-18 , (Topic 808) Clarifying the Interaction between Topic 808 and Topic 606. This update is effective for our fiscal year beginning January 1, 2020. • Compensation - Retirement Benefits - Defined Benefit Plans - General: ASU 2018-14 , (Topic 715-20) Changes to the Disclosure Requirements for Defined Benefit Plans. We elected to early adopt this update effective for our fiscal year ended December 31, 2019. Refer to Note 19 - Employee Benefit Plans for changes in the disclosures for our Defined Benefit Plans. • Fair Value Measurement: ASU 2018-13 , (Topic 820) Disclosure Framework. This update is effective for our fiscal year beginning January 1, 2020. Summary of Accounting Policies Revenue Recognition (Policies subsequent to the adoption of ASU 2014-09 - ASC Topic 606) The revenue recognition policies that follow are applicable for the periods subsequent to the adoption of ASC Topic 606, which was adopted on a modified prospective basis effective January 1, 2018 - the years ended December 31, 2019 and 2018. Refer to the section Revenue Recognition (Policies prior to the adoption of ASU 2014-09 - ASC Topic 606) below, for the revenue recognition policies prior to the adoption of ASU Topic 606, which were applicable for the year ended December 31, 2017. We generate revenue through the sale of equipment, supplies and maintenance and printing services. Revenue is measured based on consideration specified in a contract with a customer and is recognized when we satisfy a performance obligation by transferring control of a product to a customer or in the period the customer benefits from the service. With the exception of our sales-type lease arrangements, our invoices to the customer, which normally have short-term payment terms, are typically aligned to the transfer of goods or as services are rendered to our customers and therefore in most cases we recognize revenue based on our right to invoice customers. As a result of the application of this practical expedient for the substantial portion of our revenue, the disclosure of the value of unsatisfied performance obligations for our services is not required. Significant judgments primarily include the identification of performance obligations in our Document management services arrangements as well the pattern of delivery for those services. More specifically, revenue related to our products and services is generally recognized as follows: Equipment: Revenues from the sale of equipment directly to end customers, including those from sales-type leases (see below), are recognized when obligations under the terms of a contract with our customer are satisfied and control has been transferred to the customer. For equipment placements that require us to install the product at the customer location, revenue is normally recognized when the equipment has been delivered and installed at the customer location. Sales of customer installable products are recognized upon shipment or receipt by the customer according to the customer's shipping terms. Revenue from the equipment performance obligation also includes certain analyst training services performed in connection with the installation or delivery of the equipment . Maintenance services: We provide maintenance agreements on our equipment that include service and supplies for which the customer may pay a base minimum plus a price-per-page charge for usage. In arrangements that include minimums, those minimums are normally set below the customer’s estimated page volumes and are not considered substantive. These agreements are sold as part of a bundled lease arrangement or through distributors and resellers. We normally account for these maintenance agreements as a single performance obligation for printing services being delivered in a series with delivery being measured by usage as billed to the customer. Accordingly, revenue on these agreements are normally recognized as billed to the customer over the term of the agreements based on page volumes. A substantial portion of our products are sold with full service maintenance agreements, accordingly, other than the product warranty obligations associated with certain of our entry level products, we do not have any significant warranty obligations, including any obligations under customer satisfaction programs. Document management services: Revenues associated with our document management services are generally recognized as printing services are rendered, which is generally on the basis of the number of images produced. Revenues on unit-price contracts are recognized at the contractual selling prices as work is completed by the customer. We account for these arrangements as a single performance obligation for printing services being delivered in a series with delivery being measured by usage as billed to the customer . Our services contracts may also include the sale or lease of equipment and software. In these instances, we follow the policies noted for Equipment or Software Revenues and separately report the revenue associated with these performance obligations. Certain document management services arrangements may also include an embedded lease of equipment. In these instances, the revenues associated with the lease are recognized in accordance with the requirements for lease accounting. Sales to distributors and resellers: We utilize distributors and resellers to sell our equipment, supplies and maintenance services to end-user customers. We refer to our distributor and reseller network as our two-tier distribution model. Revenues on sales to distributors and resellers are generally recognized when products are shipped to such distributors and resellers. However, revenue is only recognized when the distributor or reseller has economic substance apart from the Company such that collectability is probable and we have no further obligations related to bringing about the resale, delivery or installation of the product that would impact transfer of control. Revenues associated with maintenance agreements sold through distributors and resellers to end customers are recognized in a consistent manner to maintenance services. Revenue that may be subject to a reversal of revenue due to contractual terms or uncertainties is not recorded as revenue until the contractual provisions lapse or the uncertainties are resolved. Distributors and resellers participate in various rebate, price-protection, cooperative marketing and other programs, and we estimate the variable consideration associated with these programs and record those amounts as a reduction to revenue when the sales occur. Similarly, we account for our estimates of sales returns and other allowances when the sales occur based on our historical experience. In certain instances, we may provide lease financing to end-user customers who purchased equipment we sold to distributors or resellers. We are not obligated to provide financing and we compete with other third-party leasing companies with respect to the lease financing provided to these end-user customers. Software: Most of our equipment has both software and non-software components that function together to deliver the equipment's essential functionality and therefore they are accounted for together as part of Equipment sales revenues. Software accessories sold in connection with our Equipment sales, as well as free-standing software sales are accounted for as separate performance obligations if determined to be material in relation to the overall arrangement. Revenue from software is not a significant component of our Total revenues. Supplies: Supplies revenue is recognized upon transfer of control to the customer, generally upon utilization or shipment to the customer in accordance with the sales contract terms. Financing: Finance income attributable to sales-type leases, direct financing leases and installment loans is recognized on the accrual basis using the effective interest method. Bundled Lease Arrangements: A significant portion of our direct sales of equipment to end customers are made through bundled lease arrangements that typically include equipment, maintenance and financing components for which the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of contractual page volume minimums, which are often expressed in terms of price-per-page. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed minimum payments that the customer is obligated to make (fixed payments) over the lease term. In applying our lease accounting methodology, we only consider the fixed payments for purposes of allocating to the relative fair value elements of the contract. Revenues under bundled arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment, financing, maintenance and other executory costs, while non-lease deliverables generally consist of the supplies and non-maintenance services. The allocation for the lease deliverables begins by allocating revenues to the maintenance and other executory costs plus a profit thereon. These elements are generally recognized over the term of the lease as service revenue. The remaining amounts are allocated to the equipment and financing elements, which are subjected to the accounting estimates noted below under “Leases”. Leases: The two primary lease accounting provisions we assess for the classification of transactions as sales-type or operating leases are: (1) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the equipment and (2) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fai |
Adoption of New Leasing Standar
Adoption of New Leasing Standard - Lessee | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Adoption of New Leasing Standard - Lessee | Adoption of New Leasing Standard - Lessee Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Standards and Accounting Changes for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessee Accounting Policies: We determine at inception whether an arrangement is a lease. Our leases do not include assets of a specialized nature, or the transfer of ownership at the end of the lease, and the exercise of end-of-lease purchase options, which are primarily in our equipment leases, is not reasonably assured at lease inception. Accordingly, the two primary criteria we use to classify transactions as operating or finance leases are: (i) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the asset, and (ii) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the asset at the inception of the lease. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We also assess arrangements for goods or services to determine if the arrangement contains a lease at its inception. This assessment first considers whether there is an implicitly or explicitly identified asset in the arrangement and then whether there is a right to control the use of the asset. If there is an embedded lease within a contract, the Company determines the classification of the lease at the lease inception date consistent with standalone leases of assets. Operating leases are included in Other long-term assets, Accrued expenses and other current liabilities, and Other long-term liabilities in our Consolidated Balance Sheets. Finance leases are included in Land, buildings and equipment, net, Accrued expenses and other current liabilities, and Other long-term liabilities in our Consolidated Balance Sheets. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for almost all of our leases is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that we would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. The rate is dependent on several factors, including the lease term and currency of the lease payments. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as we do not have reasonable certainty at lease inception that these options will be exercised. We generally consider the economic life of our operating lease ROU assets to be comparable to the useful life of similar owned assets. We have elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Our leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. These components are accounted for separately for vehicle and equipment leases. We account for the lease and non-lease components as a single lease component for real estate leases of offices and warehouses. We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets. We review the recoverability of our long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. We have elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. Lessee Summary: Operating Leases We have operating leases for real estate and vehicles in our domestic and international operations and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms of up to eleven years and a variety of renewal and/or termination options. The components of lease expense are as follows: Year Ended December 31, 2019 Operating lease expense $ 125 Short-term lease expense 21 Variable lease expense (1) 48 Sublease income (1 ) Total Lease expense $ 193 _____________ (1) Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as well as taxes and insurance. As of December 31, 2019 , we had no additional operating leases that had not yet commenced. Operating leases ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows: December 31, Other long-term assets $ 319 Accrued expenses and other current liabilities $ 87 Other long-term liabilities 260 Total Operating lease liabilities $ 347 Supplemental information related to operating leases is as follows: December 31, Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows $ 126 Right-of-use assets obtained in exchange for new lease liabilities (1) 75 Weighted-average remaining lease term 4 years Weighted-average discount rate 5.47 % _____________ (1) Includes the impact of new leases as well as remeasurements and modifications to existing leases. Maturities and additional information related to operating lease liabilities are as follows: December 31, 2020 $ 109 2021 87 2022 73 2023 56 2024 24 Thereafter 45 Total Lease payments 394 Less: Imputed interest 47 Total Operating lease liabilities $ 347 Finance Leases Xerox has one finance lease for equipment and related infrastructure within an outsourced warehouse supply arrangement in the U.S. The lease expires in December 2023 and has a remaining lease obligation of $7 as of December 31, 2019 based on a discount rate of 4.07% . The Right-of-use asset balance associated with this finance lease of $7 is included in Land, buildings and equipment, net in the Consolidated Balance Sheet. Prior Period Disclosures under ASC 840 For the years ended December 31, 2018 and 2017, operating lease expense, net of sublease income, was $147 and $161 , respectively. Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows: December 31, 2019 $ 114 2020 88 2021 64 2022 50 2023 36 Thereafter 27 Total Operating lease commitments $ 379 |
Adoption of New Leasing Standard - Lessee | Adoption of New Leasing Standard - Lessee Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Standards and Accounting Changes for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessee Accounting Policies: We determine at inception whether an arrangement is a lease. Our leases do not include assets of a specialized nature, or the transfer of ownership at the end of the lease, and the exercise of end-of-lease purchase options, which are primarily in our equipment leases, is not reasonably assured at lease inception. Accordingly, the two primary criteria we use to classify transactions as operating or finance leases are: (i) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the asset, and (ii) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the asset at the inception of the lease. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We also assess arrangements for goods or services to determine if the arrangement contains a lease at its inception. This assessment first considers whether there is an implicitly or explicitly identified asset in the arrangement and then whether there is a right to control the use of the asset. If there is an embedded lease within a contract, the Company determines the classification of the lease at the lease inception date consistent with standalone leases of assets. Operating leases are included in Other long-term assets, Accrued expenses and other current liabilities, and Other long-term liabilities in our Consolidated Balance Sheets. Finance leases are included in Land, buildings and equipment, net, Accrued expenses and other current liabilities, and Other long-term liabilities in our Consolidated Balance Sheets. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for almost all of our leases is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that we would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. The rate is dependent on several factors, including the lease term and currency of the lease payments. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as we do not have reasonable certainty at lease inception that these options will be exercised. We generally consider the economic life of our operating lease ROU assets to be comparable to the useful life of similar owned assets. We have elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Our leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. These components are accounted for separately for vehicle and equipment leases. We account for the lease and non-lease components as a single lease component for real estate leases of offices and warehouses. We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets. We review the recoverability of our long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. We have elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. Lessee Summary: Operating Leases We have operating leases for real estate and vehicles in our domestic and international operations and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms of up to eleven years and a variety of renewal and/or termination options. The components of lease expense are as follows: Year Ended December 31, 2019 Operating lease expense $ 125 Short-term lease expense 21 Variable lease expense (1) 48 Sublease income (1 ) Total Lease expense $ 193 _____________ (1) Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as well as taxes and insurance. As of December 31, 2019 , we had no additional operating leases that had not yet commenced. Operating leases ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows: December 31, Other long-term assets $ 319 Accrued expenses and other current liabilities $ 87 Other long-term liabilities 260 Total Operating lease liabilities $ 347 Supplemental information related to operating leases is as follows: December 31, Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows $ 126 Right-of-use assets obtained in exchange for new lease liabilities (1) 75 Weighted-average remaining lease term 4 years Weighted-average discount rate 5.47 % _____________ (1) Includes the impact of new leases as well as remeasurements and modifications to existing leases. Maturities and additional information related to operating lease liabilities are as follows: December 31, 2020 $ 109 2021 87 2022 73 2023 56 2024 24 Thereafter 45 Total Lease payments 394 Less: Imputed interest 47 Total Operating lease liabilities $ 347 Finance Leases Xerox has one finance lease for equipment and related infrastructure within an outsourced warehouse supply arrangement in the U.S. The lease expires in December 2023 and has a remaining lease obligation of $7 as of December 31, 2019 based on a discount rate of 4.07% . The Right-of-use asset balance associated with this finance lease of $7 is included in Land, buildings and equipment, net in the Consolidated Balance Sheet. Prior Period Disclosures under ASC 840 For the years ended December 31, 2018 and 2017, operating lease expense, net of sublease income, was $147 and $161 , respectively. Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows: December 31, 2019 $ 114 2020 88 2021 64 2022 50 2023 36 Thereafter 27 Total Operating lease commitments $ 379 |
Adoption of New Leasing Stand_2
Adoption of New Leasing Standard - Lessor | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Adoption of New Leasing Standard - Lessor | Adoption of New Leasing Standard - Lessor Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Standards and Accounting Changes for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessor Accounting Policies: The following represent the updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842 effective January 1, 2019: Bundled Lease Arrangements: A portion of our direct sales of equipment to end customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies. Consistent with the guidance in ASC 842 and ASC 606, regarding the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed lease payments that the customer is obligated to make over the lease term. Amounts allocated to the equipment and financing elements are then subjected to the accounting estimates noted below under Leases to ensure the values reflect standalone selling prices. The remainder of any fixed payments, as well as the variable payments, are allocated to non-lease elements because the variable consideration for incremental page volume or usage is considered attributable to the delivery of those elements. The consideration for the non-lease elements is not dependent on the consideration for equipment and vice versa and the consideration for the equipment and services is priced at the appropriate standalone values; therefore, the relative standalone selling price allocation method is not necessary. The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series with delivery being measured as the usage billed to the customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance and Services agreements (Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies). Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75%); and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90%). Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. We consider the economic life of most of our products to be five years , since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years . There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. We perform an analysis of the stand-alone selling price of equipment based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices reflects stand-alone value. Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above. Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay to third parties are considered variable payments and are recorded as other revenues and other cost of revenues, respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party. Presentation: Revenue from sales-type leases is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs. The components of lease income are as follows: Location in Statements of Income Year Ended December 31, 2019 2018 Lease income - sales type Sales $ 672 $ 699 Interest income on lease receivables Financing 244 268 Lease income - operating leases Services, maintenance and rentals 396 438 Variable lease income Services, maintenance and rentals 107 120 Total Lease income $ 1,419 $ 1,525 Profit at lease commencement on sales type leases was estimated to be approximately $276 and $302 for the two years ended December 31, 2019 and 2018, respectively. |
Adoption of New Leasing Standard - Lessor | Adoption of New Leasing Standard - Lessor Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Standards and Accounting Changes for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessor Accounting Policies: The following represent the updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842 effective January 1, 2019: Bundled Lease Arrangements: A portion of our direct sales of equipment to end customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies. Consistent with the guidance in ASC 842 and ASC 606, regarding the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed lease payments that the customer is obligated to make over the lease term. Amounts allocated to the equipment and financing elements are then subjected to the accounting estimates noted below under Leases to ensure the values reflect standalone selling prices. The remainder of any fixed payments, as well as the variable payments, are allocated to non-lease elements because the variable consideration for incremental page volume or usage is considered attributable to the delivery of those elements. The consideration for the non-lease elements is not dependent on the consideration for equipment and vice versa and the consideration for the equipment and services is priced at the appropriate standalone values; therefore, the relative standalone selling price allocation method is not necessary. The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series with delivery being measured as the usage billed to the customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance and Services agreements (Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies). Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75%); and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90%). Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. We consider the economic life of most of our products to be five years , since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years . There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. We perform an analysis of the stand-alone selling price of equipment based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices reflects stand-alone value. Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above. Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay to third parties are considered variable payments and are recorded as other revenues and other cost of revenues, respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party. Presentation: Revenue from sales-type leases is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs. The components of lease income are as follows: Location in Statements of Income Year Ended December 31, 2019 2018 Lease income - sales type Sales $ 672 $ 699 Interest income on lease receivables Financing 244 268 Lease income - operating leases Services, maintenance and rentals 396 438 Variable lease income Services, maintenance and rentals 107 120 Total Lease income $ 1,419 $ 1,525 Profit at lease commencement on sales type leases was estimated to be approximately $276 and $302 for the two years ended December 31, 2019 and 2018, respectively. |
Adoption of New Leasing Standard - Lessor | Adoption of New Leasing Standard - Lessor Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Standards and Accounting Changes for additional information related to the adoption of ASU 2016-02 , Leases (ASC Topic 842). Lessor Accounting Policies: The following represent the updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842 effective January 1, 2019: Bundled Lease Arrangements: A portion of our direct sales of equipment to end customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies. Consistent with the guidance in ASC 842 and ASC 606, regarding the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed lease payments that the customer is obligated to make over the lease term. Amounts allocated to the equipment and financing elements are then subjected to the accounting estimates noted below under Leases to ensure the values reflect standalone selling prices. The remainder of any fixed payments, as well as the variable payments, are allocated to non-lease elements because the variable consideration for incremental page volume or usage is considered attributable to the delivery of those elements. The consideration for the non-lease elements is not dependent on the consideration for equipment and vice versa and the consideration for the equipment and services is priced at the appropriate standalone values; therefore, the relative standalone selling price allocation method is not necessary. The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series with delivery being measured as the usage billed to the customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance and Services agreements (Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies). Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75%); and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90%). Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. We consider the economic life of most of our products to be five years , since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years . There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. We perform an analysis of the stand-alone selling price of equipment based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices reflects stand-alone value. Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above. Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay to third parties are considered variable payments and are recorded as other revenues and other cost of revenues, respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party. Presentation: Revenue from sales-type leases is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs. The components of lease income are as follows: Location in Statements of Income Year Ended December 31, 2019 2018 Lease income - sales type Sales $ 672 $ 699 Interest income on lease receivables Financing 244 268 Lease income - operating leases Services, maintenance and rentals 396 438 Variable lease income Services, maintenance and rentals 107 120 Total Lease income $ 1,419 $ 1,525 Profit at lease commencement on sales type leases was estimated to be approximately $276 and $302 for the two years ended December 31, 2019 and 2018, respectively. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows: Year Ended December 31, 2019 2018 2017 Primary geographical markets (1) United States $ 5,429 $ 5,610 $ 5,790 Europe 2,326 2,625 2,697 Canada 518 569 648 Other 793 858 856 Total Revenues $ 9,066 $ 9,662 $ 9,991 Major product and services lines Equipment (2) $ 2,062 $ 2,178 $ 2,152 Supplies, paper and other sales 1,165 1,276 1,260 Maintenance agreements (3) 2,372 2,603 2,809 Service arrangements (4) 2,517 2,674 2,722 Rental and other 706 663 754 Financing 244 268 294 Total Revenues (5) $ 9,066 $ 9,662 $ 9,991 Sales channels: Direct equipment lease (6) $ 672 $ 699 $ 718 Distributors & resellers (7) 1,343 1,445 1,502 Customer direct 1,212 1,310 1,192 Total Sales $ 3,227 $ 3,454 $ 3,412 _____________ (1) Geographic area data is based upon the location of the subsidiary reporting the revenue. (2) For the year ended December 31, 2017, Equipment sale revenues excluded $44 of equipment-related training revenue, which was classified as Services under previous revenue guidance - refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition. (3) Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through our channel partners as Xerox Partner Print Services (XPPS). (4) Primarily includes revenues from our Managed Services offerings (formerly our Managed Documents Services arrangements). Also includes revenues from embedded operating leases, which were not significant. (5) Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Change in Presentation, for additional information. (6) Primarily reflects sales through bundled lease arrangements. (7) Primarily reflects sales through our two-tier distribution channels. Contract assets and liabilities: We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time. Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advanced billings for maintenance and other services to be performed and were approximately $137 and $116 at December 31, 2019 and 2018 , respectively. The majority of the balance at December 31, 2019 will be amortized to revenue over approximately the next 30 months . Contract Costs: Incremental direct costs of obtaining a contract primarily include sales commissions paid to sales people and agents in connection with the placement of equipment with associated post sale services arrangements. These costs are deferred and amortized on the straight-line basis over the estimated contract term , which is currently estimated to be approximately four years . We pay commensurate sales commissions upon customer renewals, therefore our amortization period is aligned to our initial contract term. Year Ended December 31, 2019 2018 Incremental direct costs of obtaining a contract $ 78 $ 84 Amortization of incremental direct costs 88 95 The balance of deferred incremental direct costs net of accumulated amortization at December 31, 2019 and 2018 was $163 and $172 , respectively. This amount is expected to be amortized over its estimated period of benefit, which we currently estimate to be approximately four years . We may also incur costs associated with our services arrangements to generate or enhance resources and assets that will be used to satisfy our future performance obligations included in these arrangements. These costs are considered contract fulfillment costs and are amortized over the contractual service period of the arrangement to cost of services. In addition, we also provide inducements to certain customers in various forms, including contractual credits, which are capitalized and amortized as a reduction of revenue over the term of the contract. Amounts deferred associated with contract fulfillment costs and inducements were $13 and $12 at December 31, 2019 and 2018 , respectively, and related amortization was $5 and $5 for the years ended December 31, 2019 and 2018, respectively. Equipment and software used in the fulfillment of service arrangements and where the Company retains control are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific. |
Segment and Geographic Area Rep
Segment and Geographic Area Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment and Geographic Area Reporting | Segment and Geographic Area Reporting Segment Discussion We manage our operations on a geographic basis and are primarily organized from a sales perspective on the basis of “go-to-market” sales channels. These sales channels are structured to serve a range of customers for our products and services. As a result of this structure, we concluded that we have one operating and reportable segment - the design, development and sale of document management systems and solutions. Our chief executive officer was identified as the chief operating decision maker (“CODM”). All of the company’s activities are interrelated, and each activity is dependent upon and supportive of the other, including product development, supply chain and back-office support services. In addition, all significant operating decisions, by management and the Board, are largely based upon the analysis of Xerox Holdings and Xerox on a total company basis, including assessments related to our incentive compensation plans. Geographic Area Data Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is as follows: Revenues Long-Lived Assets (1) Year Ended December 31, As of December 31, 2019 2018 2017 2019 2018 United States $ 5,429 $ 5,610 $ 5,790 $ 769 $ 670 Europe 2,326 2,625 2,697 305 277 Other areas 1,311 1,427 1,504 157 147 Total $ 9,066 $ 9,662 $ 9,991 $ 1,231 $ 1,094 _____________ (1) |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 2019 Acquisitions Xerox continues to focus on further penetrating the small-to-medium sized business (SMB) market through organic and inorganic growth, which includes acquisitions of local area resellers and partners (including multi-brand dealers). During 2019, business acquisitions totaled $38 and included Rabbit Office Automation (ROA), a San Francisco Bay area dealer, and Heritage Business Systems, Inc. (HBS), a Delaware Valley dealer. The acquisition of these dealers expands our distribution capabilities of office technology sales, services and supplies to SMB customers in these markets. 2019 acquisitions also include $4 related to an acquisition of assets. 2019 Summary All of our 2019 acquisitions resulted in 100% ownership of the acquired companies. The operating results of these acquisitions are not material to our financial statements and are included within our results from the respective acquisition dates. The purchase prices were all cash and were primarily allocated to Intangible assets, net and Goodwill. Of the goodwill recorded in 2019, 100% is expected to be deductible for tax purposes. Our 2019 acquisitions contributed aggregate revenues of approximately $18 to our 2019 total revenues from their respective acquisition dates. The following table summarizes the purchase price allocations for our 2019 acquisitions as of the acquisition dates: Weighted-Average Life (Years) Total 2019 Acquisitions Accounts/finance receivables $ 3 Intangible assets: Customer relationships 10 19 Trademarks 5 2 Goodwill 14 Other assets 3 Total Assets acquired 41 Liabilities assumed (3 ) Total Purchase Price $ 38 2018 Acquisitions There were no business acquisitions in 2018. 2017 Acquisitions Business acquisitions in 2017 totaled $87 , in cash, and included the acquisition of MT Business Technologies, Inc. (MT Business), an Ohio-based multi-brand dealer, and two smaller multi-brand dealers in Iowa and North and South Carolina. The acquisitions in 2017 were part of the strategy to increase our SMB coverage through resellers and partners (including multi-brand dealers) and continued distribution acquisitions. 2017 Summary All of our 2017 acquisitions resulted in 100% ownership of the acquired companies. The operating results of the 2017 acquisitions described above are not material to our financial statements and were included within our results from the respective acquisition dates. The purchase prices for these acquisitions were primarily allocated to Intangible assets, net and Goodwill based on third-party valuations and management's estimates. The primary elements that generated the goodwill are the value of synergies and the acquired assembled workforce. Refer to Note 13 - Goodwill and Intangible Assets, Net for additional information. Our 2017 acquisitions contributed aggregate revenues from their respective acquisition dates of approximately $76 , $79 and $54 to our 2019 , 2018 and 2017 total revenues, respectively. |
Divestitures
Divestitures | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Divestitures Discontinued Operations Sales of Ownership Interests in Fuji Xerox Co., Ltd. and Xerox International Partners In November 2019, Xerox Holdings completed a series of transactions to restructure its relationship with FUJIFILM Holdings Corporation (FH), including the sale of its indirect 25% equity interest in Fuji Xerox (FX) for approximately $2.2 billion as well as the sale of its indirect 51% partnership interest in Xerox International Partners (XIP) for approximately $23 (collectively the Sales). As a result of the Sales and the related strategic shift in our business, the historical financial results of our equity method investment in FX and our XIP business (which was consolidated) for the periods prior to the Sales are reflected as a discontinued operation and as such, their impact is excluded from continuing operations for all periods presented. The Sales resulted in a pre-tax gain of $629 ( $539 after-tax), and included a reclassification from Accumulated other comprehensive loss of $165 (Refer to Note 25 - Other Comprehensive (Loss) Income) as well as approximately $9 of transaction costs and $9 of allocated goodwill associated with our XIP business (Refer to Note 13 - Goodwill and Intangible Assets, Net). The XIP allocated goodwill was based on the relative fair value of our XIP business, as evidenced by the sales price, as compared to the total estimated fair value of Xerox. No Goodwill was allocated for our investment in FX based on consideration of the guidance in ASC 350-20-40-2 and the fact that an equity investment is not considered a business in accordance with ASC 805-10-55, as it was not controlled by Xerox. The transactions with FH also included an OEM license agreement by and between FX and Xerox, granting FX the right to use specific Xerox Intellectual Property (IP) in providing certain named original equipment manufacturers (OEM’s) with products (such as printer engines) in exchange for a one-time upfront license fee of $77 . The license fee is recorded within Rental and other revenues. In addition, arrangements with FX whereby we purchase inventory from and sell inventory to FX, will continue after the Sales and, as a result of our Technology Agreement with Fuji Xerox which remains in effect after the Sales through March 2021, we will continue to receive royalty payments for FX’s use of our Xerox brand trademark, as well as rights to access our patent portfolio in exchange for access to their patent portfolio. Refer to Note 12 - Investment in Affiliates, at Equity, for additional information on transactions with FX as well as Note 27 - Subsequent Events for additional information regarding our Technology Agreement with FX. Business Process Outsourcing (BPO) On December 31, 2016, Xerox completed the Separation of its BPO business through the Distribution of all of the issued and outstanding stock of Conduent Incorporated to Xerox Corporation stockholders. As a result of the Separation and Distribution, the financial position and results of operations of the BPO Business were presented as Discontinued Operations. Discontinued Operations for the year ended December 31, 2017 include immaterial follow-on impacts from the BPO separation - see note (1) to table below. In connection with the Separation, Conduent made a net cash distribution to Xerox of approximately $1.8 billion prior to the Distribution Date. Xerox used a portion of the cash distribution proceeds to repay the $1.0 billion Senior Unsecured Term Facility in January 2017, which was required to be repaid upon completion of the Separation. Summarized financial information for our Discontinued Operations is as follows: Year Ended December 31, 2019 2018 2017 Revenue $ 79 $ 168 $ 274 Income from operations (1) $ 176 $ 74 $ 138 Gain on disposal 629 — — Income before income taxes 805 74 138 Income tax expense (1) 95 10 1 Income from discontinued operations, net of tax 710 64 137 Income from discontinued operations attributable to noncontrolling interests, net of tax 5 9 8 Income from discontinued operations, attributable to Xerox, net of tax (1) $ 705 $ 55 $ 129 _____________ (1) 2017 Income from discontinued operations, net of tax, attributable to Xerox includes $3 related to the BPO separation, that includes a loss from operations of $(9) and income tax benefit of $12 with both amounts primarily related to changes in estimated amounts recorded in 2016. The following is a summary of selected financial information for our Discontinued Operations: Year Ended December 31, 2019 2018 2017 Cost and Expenses: Cost of revenues $ 44 $ 110 $ 218 Other expenses 6 9 20 Total Costs and Expenses $ 50 $ 119 $ 238 Selected amounts included in Costs and Expenses: Depreciation and amortization $ — $ — $ 1 Restructuring and related costs — 1 — Other: Equity in net income of FX $ 147 $ 25 $ 102 Net income attributable to noncontrolling interest - XIP 5 9 8 Capital expenditures — — — The following is a summary of the major categories of assets and liabilities of XIP and our Investment in FX as of the date of sale. The balances as of December 31, 2018 are included in Assets and Liabilities of discontinued operations in the Consolidated Balance Sheets: At Date of Sale December 31, 2018 Assets Cash and cash equivalents $ 1 $ 3 Accounts receivable, net 3 6 Inventories 5 7 Other current assets — 3 Total current assets 9 19 Land, building and equipment, net 1 1 Goodwill 9 9 Other long-term assets 1,471 1,342 Total Assets of discontinued operations $ 1,490 $ 1,371 Liabilities Accounts payable $ 8 $ 18 Accrued compensation and benefits costs 1 1 Accrued expenses and other current liabilities 2 2 Total current liabilities 11 21 Other long-term liabilities 1 — Total Liabilities of discontinued operations $ 12 $ 21 XIP had noncontrolling interests of $32 at the date of sale and $36 at December 31, 2018. Refer to Note 12 - Investments in Affiliates, at Equity for additional information regarding FX, including summarized financial information of FX. Other Divestitures Xerox Research Centre Europe in Grenoble In August 2017 , we completed the sale of the Xerox Research Centre Europe in Grenoble, France to Naver Corporation (Naver). The selling price was approximately $23 and resulted in a pre-tax gain of $13 ( $4 after-tax), which is included in Other expenses, net in the Consolidated Statements of Income for the year ended December 31, 2017 . The sale included the transfer of approximately 80 researchers and administrative staff who became part of Naver. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net were as follows: December 31, 2019 2018 Invoiced $ 980 $ 992 Accrued 311 334 Allowance for doubtful accounts (55 ) (56 ) Accounts receivable, net $ 1,236 $ 1,270 Accrued receivables includes amounts to be invoiced in the subsequent quarter for current services provided. We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. The allowance for uncollectible accounts receivable is determined principally on the basis of past collection experience as well as consideration of current economic conditions and changes in our customer collection trends. Accounts Receivable Sales Arrangements Accounts receivable sales arrangements are utilized in the normal course of business as part of our cash and liquidity management. The accounts receivable sold are generally short-term trade receivables with payment due dates of less than 60 days. We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on an ongoing basis without recourse. Under this arrangement, we sell our entire interest in the related accounts receivable for cash and no portion of the payment is held back or deferred by the purchaser. Of the accounts receivable sold and derecognized from our balance sheet, $165 and $131 remained uncollected as of December 31, 2019 and 2018 , respectively. Accounts receivable sales activity was as follows: Year Ended December 31, 2019 2018 2017 Accounts receivable sales (1) $ 393 $ 405 $ 1,733 Deferred proceeds (2) — — 164 Loss on sale of accounts receivable 3 3 10 _____________ (1) Customers may also enter into structured-payable arrangements that require us to sell our receivables from that customer to a third-party financial institution, which then makes payments to us to settle the customer's receivable. In these instances, we ensure the sale of the receivables are bankruptcy-remote and the payment made to us is without recourse. The activity associated with these arrangements is not reflected in this disclosure, as payments under these arrangements have not been material and these are customer directed arrangements. (2) During 2017, we terminated all accounts receivable sales arrangements in North America and all but one arrangement in Europe, In these terminated arrangements, a portion of the sales proceeds was normally held back by the purchaser and payment was deferred until collection of the related sold receivables. Finance receivables include sales-type leases and installment loans arising from the marketing of our equipment. These receivables are typically collateralized by a security interest in the underlying equipment. Amounts disclosed below at December 31, 2018 were accounted for under ASC 840, Leases, which was superseded by ASC 842, Leases, which was adopted effective January 1, 2019. Differences upon adoption were not material. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, New Accounting Standards and Accounting Changes for additional information. Finance receivables, net were as follows: December 31, 2019 2018 Gross receivables $ 3,865 $ 4,003 Unearned income (425 ) (439 ) Subtotal 3,440 3,564 Residual values — — Allowance for doubtful accounts (89 ) (92 ) Finance Receivables, Net 3,351 3,472 Less: Billed portion of finance receivables, net 111 105 Less: Current portion of finance receivables not billed, net 1,158 1,218 Finance Receivables Due After One Year, Net $ 2,082 $ 2,149 A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as follows: December 31, 2019 2018 12 Months (1) $ 1,490 $ 1,543 24 Months 1,052 1,108 36 Months 728 755 48 Months 422 425 60 Months 158 158 Thereafter 15 14 Total $ 3,865 $ 4,003 _____________ (1) Includes amounts previously billed of $115 and $107 as of December 31, 2019 and 2018 , respectively. Finance Receivables - Allowance for Credit Losses and Credit Quality Our finance receivable portfolios are primarily in the U.S., Canada and Europe. We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis. Customer credit limits are based upon an initial evaluation of the customer's credit quality and we adjust that limit accordingly based upon ongoing credit assessments of the customer, including payment history and changes in credit quality. The allowance for doubtful accounts and provision for credit losses represents an estimate of the losses expected to be incurred from the Company's finance receivable portfolio. The level of the allowance is determined on a collective basis by applying projected loss rates to our different portfolios by country, which represent our portfolio segments. This is the level at which we develop and document our methodology to determine the allowance for credit losses. This loss rate is primarily based upon historical loss experience adjusted for judgments about the probable effects of relevant observable data including current economic conditions as well as delinquency trends, resolution rates, the aging of receivables, credit quality indicators and the financial health of specific customer classes or groups. The allowance for doubtful finance receivables is inherently more difficult to estimate than the allowance for trade accounts receivable because the underlying lease portfolio has an average maturity, at any time, of approximately two to three years and contains past due billed amounts, as well as unbilled amounts. We consider all available information in our quarterly assessments of the adequacy of the allowance for doubtful accounts. The identification of account-specific exposure is not a significant factor in establishing the allowance for doubtful finance receivables. Our policy and methodology used to establish our allowance for doubtful accounts has been consistently applied over all periods presented. Since our allowance for doubtful finance receivables is determined by country, the risk characteristics in our finance receivable portfolio segments will generally be consistent with the risk factors associated with the economies of those countries/regions. Charge-offs in the U.S. remained steady and did not change significantly during 2019 and 2018 . Since Europe is comprised of various countries and regional economies, the risk profile within our European portfolio segment is somewhat more diversified due to the varying economic conditions among and within the countries. Charge-offs in Europe were $14 in 2019 as compared to $18 in 2018 , with the decrease reflecting the stabilization of the Europe portfolio segment. The following table is a rollforward of the allowance for doubtful finance receivables as well as the related investment in finance receivables: Allowance for Credit Losses: United States Canada Europe Other (1) Total Balance at December 31, 2017 $ 56 $ 15 $ 35 $ 2 $ 108 Provision 12 3 9 — 24 Charge-offs (17 ) (6 ) (18 ) — (41 ) Recoveries and other (2) 2 — (1 ) — 1 Balance at December 31, 2018 $ 53 $ 12 $ 25 $ 2 $ 92 Provision 20 1 7 — 28 Charge-offs (15 ) (5 ) (14 ) — (34 ) Recoveries and other (2) 1 2 — — 3 Balance at December 31, 2019 $ 59 $ 10 $ 18 $ 2 $ 89 Finance Receivables Collectively Evaluated for Impairment: December 31, 2018 (3)(4) $ 1,946 $ 335 $ 1,239 $ 44 $ 3,564 December 31, 2019 (3) $ 1,922 $ 320 $ 1,155 $ 43 $ 3,440 _____________ (1) Includes developing market countries and smaller units. (2) Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. (3) Total Finance receivables exclude the allowance for credit losses of $89 and $92 at December 31, 2019 and 2018 , respectively. (4) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. In the U.S., customers are further evaluated by class based on the type of lease origination. The primary categories are direct, which primarily includes leases originated directly with end customers through bundled lease arrangements, and indirect, which includes lease financing to end-user customers who purchased equipment we sold to distributors or resellers. Indirect also includes leases originated through our XBS sales channel, which utilizes a combination of internal and third party leasing in its lease arrangements with end customers. In Europe, customers are further grouped by class based on the country or region of the customer. The primary customer classes include the U.K./Ireland, France and the following European regions - Central, Nordic and Southern. These groupings or classes are used to understand the nature and extent of our exposure to credit risk arising from finance receivables. We evaluate our customers within the various classes based on the following credit quality indicators: • Investment grade: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. The rating generally equates to a Standard & Poors (S&P) rating of BBB- or better. Loss rates in this category are normally less than 1% . • Non-investment grade: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. This rating generally equates to a BB S&P rating. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain with such leases. Loss rates in this category are generally in the range of 2% to 5% . • Substandard: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from investment and non-investment grade evaluation when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category are generally in the range of 7% to 10% . Credit quality indicators are updated at least annually, and the credit quality of any given customer can change during the life of the portfolio. Details about our finance receivables portfolio based on geography and credit quality indicators are as follows: December 31, 2019 December 31, 2018 Investment Grade Non-investment Grade Sub-standard Total Finance Receivables Investment Grade Non-investment Grade Sub-standard Total Finance Receivables Direct $ 640 $ 331 $ 132 $ 1,103 $ 785 $ 348 $ 104 $ 1,237 Indirect 258 445 116 819 162 400 147 709 Total United States (1) 898 776 248 1,922 947 748 251 1,946 Total Canada 163 91 66 320 162 99 74 335 France 206 137 24 367 232 157 29 418 U.K/Ireland 154 79 8 241 150 87 7 244 Central (2) 176 113 9 298 196 123 8 327 Southern (3) 65 125 15 205 52 136 17 205 Nordic (4) 23 19 2 44 28 15 2 45 Total Europe (5) 624 473 58 1,155 658 518 63 1,239 Other 31 12 — 43 31 13 — 44 Total $ 1,716 $ 1,352 $ 372 $ 3,440 $ 1,798 $ 1,378 $ 388 $ 3,564 _____________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. (5) Prior year amounts have been recasted to conform to the current year presentation. The aging of our receivables portfolio is based upon the number of days an invoice is past due. Receivables that are more than 90 days past due are considered delinquent. Receivable losses are charged against the allowance when management believes the uncollectibility of the receivable is confirmed and is generally based on individual credit evaluations, results of collection efforts and specific circumstances of the customer. Subsequent recoveries, if any, are credited to the allowance. We generally continue to maintain equipment on lease and provide services to customers that have invoices for finance receivables that are 90 days or more past due and, as a result of the bundled nature of billings, we also continue to accrue interest on those receivables. However, interest revenue for such billings is only recognized if collectability is deemed reasonably assured. The aging of our billed finance receivables is as follows: December 31, 2019 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Direct $ 37 $ 11 $ 8 $ 56 $ 1,047 $ 1,103 $ 57 Indirect 25 5 3 33 786 819 — Total United States 62 16 11 89 1,833 1,922 57 Canada 8 1 1 10 310 320 17 France 3 — — 3 364 367 15 U.K./Ireland 2 — — 2 239 241 — Central (1) 2 — 1 3 295 298 13 Southern (2) 3 1 1 5 200 205 4 Nordic (3) — — — — 44 44 — Total Europe 10 1 2 13 1,142 1,155 32 Other 2 1 — 3 40 43 — Total $ 82 $ 19 $ 14 $ 115 $ 3,325 $ 3,440 $ 106 December 31, 2018 Current 31-90 >90 Days Total Billed Unbilled Total >90 Days Direct $ 38 $ 11 $ 7 $ 56 $ 1,181 $ 1,237 $ 54 Indirect 18 4 2 24 685 709 — Total United States 56 15 9 80 1,866 1,946 54 Canada 7 2 1 10 325 335 22 France 5 — — 5 413 418 14 U.K./Ireland 2 — — 2 242 244 — Central (1) 1 1 1 3 324 327 6 Southern (2) 3 1 1 5 200 205 6 Nordic (3) — — — — 45 45 — Total Europe 11 2 2 15 1,224 1,239 26 Other 2 — — 2 42 44 — Total $ 76 $ 19 $ 12 $ 107 $ 3,457 $ 3,564 $ 102 _____________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. |
Finance Receivables, Net
Finance Receivables, Net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Finance Receivables, Net | Accounts Receivable, Net Accounts receivable, net were as follows: December 31, 2019 2018 Invoiced $ 980 $ 992 Accrued 311 334 Allowance for doubtful accounts (55 ) (56 ) Accounts receivable, net $ 1,236 $ 1,270 Accrued receivables includes amounts to be invoiced in the subsequent quarter for current services provided. We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. The allowance for uncollectible accounts receivable is determined principally on the basis of past collection experience as well as consideration of current economic conditions and changes in our customer collection trends. Accounts Receivable Sales Arrangements Accounts receivable sales arrangements are utilized in the normal course of business as part of our cash and liquidity management. The accounts receivable sold are generally short-term trade receivables with payment due dates of less than 60 days. We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on an ongoing basis without recourse. Under this arrangement, we sell our entire interest in the related accounts receivable for cash and no portion of the payment is held back or deferred by the purchaser. Of the accounts receivable sold and derecognized from our balance sheet, $165 and $131 remained uncollected as of December 31, 2019 and 2018 , respectively. Accounts receivable sales activity was as follows: Year Ended December 31, 2019 2018 2017 Accounts receivable sales (1) $ 393 $ 405 $ 1,733 Deferred proceeds (2) — — 164 Loss on sale of accounts receivable 3 3 10 _____________ (1) Customers may also enter into structured-payable arrangements that require us to sell our receivables from that customer to a third-party financial institution, which then makes payments to us to settle the customer's receivable. In these instances, we ensure the sale of the receivables are bankruptcy-remote and the payment made to us is without recourse. The activity associated with these arrangements is not reflected in this disclosure, as payments under these arrangements have not been material and these are customer directed arrangements. (2) During 2017, we terminated all accounts receivable sales arrangements in North America and all but one arrangement in Europe, In these terminated arrangements, a portion of the sales proceeds was normally held back by the purchaser and payment was deferred until collection of the related sold receivables. Finance receivables include sales-type leases and installment loans arising from the marketing of our equipment. These receivables are typically collateralized by a security interest in the underlying equipment. Amounts disclosed below at December 31, 2018 were accounted for under ASC 840, Leases, which was superseded by ASC 842, Leases, which was adopted effective January 1, 2019. Differences upon adoption were not material. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, New Accounting Standards and Accounting Changes for additional information. Finance receivables, net were as follows: December 31, 2019 2018 Gross receivables $ 3,865 $ 4,003 Unearned income (425 ) (439 ) Subtotal 3,440 3,564 Residual values — — Allowance for doubtful accounts (89 ) (92 ) Finance Receivables, Net 3,351 3,472 Less: Billed portion of finance receivables, net 111 105 Less: Current portion of finance receivables not billed, net 1,158 1,218 Finance Receivables Due After One Year, Net $ 2,082 $ 2,149 A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as follows: December 31, 2019 2018 12 Months (1) $ 1,490 $ 1,543 24 Months 1,052 1,108 36 Months 728 755 48 Months 422 425 60 Months 158 158 Thereafter 15 14 Total $ 3,865 $ 4,003 _____________ (1) Includes amounts previously billed of $115 and $107 as of December 31, 2019 and 2018 , respectively. Finance Receivables - Allowance for Credit Losses and Credit Quality Our finance receivable portfolios are primarily in the U.S., Canada and Europe. We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis. Customer credit limits are based upon an initial evaluation of the customer's credit quality and we adjust that limit accordingly based upon ongoing credit assessments of the customer, including payment history and changes in credit quality. The allowance for doubtful accounts and provision for credit losses represents an estimate of the losses expected to be incurred from the Company's finance receivable portfolio. The level of the allowance is determined on a collective basis by applying projected loss rates to our different portfolios by country, which represent our portfolio segments. This is the level at which we develop and document our methodology to determine the allowance for credit losses. This loss rate is primarily based upon historical loss experience adjusted for judgments about the probable effects of relevant observable data including current economic conditions as well as delinquency trends, resolution rates, the aging of receivables, credit quality indicators and the financial health of specific customer classes or groups. The allowance for doubtful finance receivables is inherently more difficult to estimate than the allowance for trade accounts receivable because the underlying lease portfolio has an average maturity, at any time, of approximately two to three years and contains past due billed amounts, as well as unbilled amounts. We consider all available information in our quarterly assessments of the adequacy of the allowance for doubtful accounts. The identification of account-specific exposure is not a significant factor in establishing the allowance for doubtful finance receivables. Our policy and methodology used to establish our allowance for doubtful accounts has been consistently applied over all periods presented. Since our allowance for doubtful finance receivables is determined by country, the risk characteristics in our finance receivable portfolio segments will generally be consistent with the risk factors associated with the economies of those countries/regions. Charge-offs in the U.S. remained steady and did not change significantly during 2019 and 2018 . Since Europe is comprised of various countries and regional economies, the risk profile within our European portfolio segment is somewhat more diversified due to the varying economic conditions among and within the countries. Charge-offs in Europe were $14 in 2019 as compared to $18 in 2018 , with the decrease reflecting the stabilization of the Europe portfolio segment. The following table is a rollforward of the allowance for doubtful finance receivables as well as the related investment in finance receivables: Allowance for Credit Losses: United States Canada Europe Other (1) Total Balance at December 31, 2017 $ 56 $ 15 $ 35 $ 2 $ 108 Provision 12 3 9 — 24 Charge-offs (17 ) (6 ) (18 ) — (41 ) Recoveries and other (2) 2 — (1 ) — 1 Balance at December 31, 2018 $ 53 $ 12 $ 25 $ 2 $ 92 Provision 20 1 7 — 28 Charge-offs (15 ) (5 ) (14 ) — (34 ) Recoveries and other (2) 1 2 — — 3 Balance at December 31, 2019 $ 59 $ 10 $ 18 $ 2 $ 89 Finance Receivables Collectively Evaluated for Impairment: December 31, 2018 (3)(4) $ 1,946 $ 335 $ 1,239 $ 44 $ 3,564 December 31, 2019 (3) $ 1,922 $ 320 $ 1,155 $ 43 $ 3,440 _____________ (1) Includes developing market countries and smaller units. (2) Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. (3) Total Finance receivables exclude the allowance for credit losses of $89 and $92 at December 31, 2019 and 2018 , respectively. (4) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. In the U.S., customers are further evaluated by class based on the type of lease origination. The primary categories are direct, which primarily includes leases originated directly with end customers through bundled lease arrangements, and indirect, which includes lease financing to end-user customers who purchased equipment we sold to distributors or resellers. Indirect also includes leases originated through our XBS sales channel, which utilizes a combination of internal and third party leasing in its lease arrangements with end customers. In Europe, customers are further grouped by class based on the country or region of the customer. The primary customer classes include the U.K./Ireland, France and the following European regions - Central, Nordic and Southern. These groupings or classes are used to understand the nature and extent of our exposure to credit risk arising from finance receivables. We evaluate our customers within the various classes based on the following credit quality indicators: • Investment grade: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. The rating generally equates to a Standard & Poors (S&P) rating of BBB- or better. Loss rates in this category are normally less than 1% . • Non-investment grade: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. This rating generally equates to a BB S&P rating. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain with such leases. Loss rates in this category are generally in the range of 2% to 5% . • Substandard: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from investment and non-investment grade evaluation when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category are generally in the range of 7% to 10% . Credit quality indicators are updated at least annually, and the credit quality of any given customer can change during the life of the portfolio. Details about our finance receivables portfolio based on geography and credit quality indicators are as follows: December 31, 2019 December 31, 2018 Investment Grade Non-investment Grade Sub-standard Total Finance Receivables Investment Grade Non-investment Grade Sub-standard Total Finance Receivables Direct $ 640 $ 331 $ 132 $ 1,103 $ 785 $ 348 $ 104 $ 1,237 Indirect 258 445 116 819 162 400 147 709 Total United States (1) 898 776 248 1,922 947 748 251 1,946 Total Canada 163 91 66 320 162 99 74 335 France 206 137 24 367 232 157 29 418 U.K/Ireland 154 79 8 241 150 87 7 244 Central (2) 176 113 9 298 196 123 8 327 Southern (3) 65 125 15 205 52 136 17 205 Nordic (4) 23 19 2 44 28 15 2 45 Total Europe (5) 624 473 58 1,155 658 518 63 1,239 Other 31 12 — 43 31 13 — 44 Total $ 1,716 $ 1,352 $ 372 $ 3,440 $ 1,798 $ 1,378 $ 388 $ 3,564 _____________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. (5) Prior year amounts have been recasted to conform to the current year presentation. The aging of our receivables portfolio is based upon the number of days an invoice is past due. Receivables that are more than 90 days past due are considered delinquent. Receivable losses are charged against the allowance when management believes the uncollectibility of the receivable is confirmed and is generally based on individual credit evaluations, results of collection efforts and specific circumstances of the customer. Subsequent recoveries, if any, are credited to the allowance. We generally continue to maintain equipment on lease and provide services to customers that have invoices for finance receivables that are 90 days or more past due and, as a result of the bundled nature of billings, we also continue to accrue interest on those receivables. However, interest revenue for such billings is only recognized if collectability is deemed reasonably assured. The aging of our billed finance receivables is as follows: December 31, 2019 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Direct $ 37 $ 11 $ 8 $ 56 $ 1,047 $ 1,103 $ 57 Indirect 25 5 3 33 786 819 — Total United States 62 16 11 89 1,833 1,922 57 Canada 8 1 1 10 310 320 17 France 3 — — 3 364 367 15 U.K./Ireland 2 — — 2 239 241 — Central (1) 2 — 1 3 295 298 13 Southern (2) 3 1 1 5 200 205 4 Nordic (3) — — — — 44 44 — Total Europe 10 1 2 13 1,142 1,155 32 Other 2 1 — 3 40 43 — Total $ 82 $ 19 $ 14 $ 115 $ 3,325 $ 3,440 $ 106 December 31, 2018 Current 31-90 >90 Days Total Billed Unbilled Total >90 Days Direct $ 38 $ 11 $ 7 $ 56 $ 1,181 $ 1,237 $ 54 Indirect 18 4 2 24 685 709 — Total United States 56 15 9 80 1,866 1,946 54 Canada 7 2 1 10 325 335 22 France 5 — — 5 413 418 14 U.K./Ireland 2 — — 2 242 244 — Central (1) 1 1 1 3 324 327 6 Southern (2) 3 1 1 5 200 205 6 Nordic (3) — — — — 45 45 — Total Europe 11 2 2 15 1,224 1,239 26 Other 2 — — 2 42 44 — Total $ 76 $ 19 $ 12 $ 107 $ 3,457 $ 3,564 $ 102 _____________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. |
Inventories and Equipment on Op
Inventories and Equipment on Operating Leases, Net | 12 Months Ended |
Dec. 31, 2019 | |
Inventories and Equipment on Operating Leases, Net [Abstract] | |
Inventories and Equipment on Operating Leases, Net | Inventories and Equipment on Operating Leases, Net The following is a summary of Inventories by major category: December 31, 2019 2018 Finished goods $ 576 $ 710 Work-in-process 47 49 Raw materials 71 70 Total Inventories $ 694 $ 829 The transfer of equipment from our inventories to equipment subject to an operating lease is presented in our Consolidated Statements of Cash Flows in the operating activities section. Equipment on operating leases and similar arrangements consists of our equipment rented to customers and depreciated to estimated salvage value at the end of the lease term. Amounts disclosed below at December 31, 2018 were accounted for under ASC 840, Leases, which was superseded by ASC 842, Leases, adopted on January 1, 2019. Differences upon adoption were not material. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, Recent Accounting Pronouncements for additional information. Equipment on operating leases and the related accumulated depreciation were as follows: December 31, 2019 2018 Equipment on operating leases $ 1,443 $ 1,519 Accumulated depreciation (1,079 ) (1,077 ) Equipment on operating leases, net $ 364 $ 442 Depreciable lives generally vary from three to five years consistent with our planned and historical usage of the equipment subject to operating leases. Estimated minimum future revenues associated with Equipment on operating leases are as follows: December 31, 2019 2018 12 months $ 226 $ 260 24 months 139 178 36 months 84 111 48 months 39 61 60 months 12 21 Thereafter 2 2 Total $ 502 $ 633 Total contingent rentals on operating leases, consisting principally of usage charges in excess of minimum contracted amounts, for the years ended December 31, 2019 , 2018 and 2017 amounted to $107 , $120 and $119 |
Land, Buildings, Equipment and
Land, Buildings, Equipment and Software, Net | 12 Months Ended |
Dec. 31, 2019 | |
Land, Buildings and Equipment, Net [Abstract] | |
Land, Buildings, Equipment and Software, Net | Land, Buildings, Equipment and Software, Net Land, buildings and equipment, net were as follows: December 31, Estimated Useful Lives (Years) 2019 2018 Land $ 12 $ 12 Building and building equipment 25 to 50 794 793 Leasehold improvements Varies 135 178 Plant machinery 5 to 12 1,124 1,143 Office furniture and equipment 3 to 15 565 607 Other 4 to 20 45 45 Construction in progress 23 26 Subtotal 2,698 2,804 Accumulated depreciation (2,272 ) (2,306 ) Land, buildings and equipment, net $ 426 $ 498 Depreciation expense was $101 , $148 and $136 for the three years ended December 31, 2019 , 2018 and 2017 , respectively. We lease buildings and equipment, substantially all of which are accounted for as operating leases. Finance leased assets were $7 and $9 at December 31, 2019 and 2018 , respectively. Refer to Note 2 - Adoption of New Leasing Standard - Lessee for additional information regarding leased assets. Internal Use Software As of December 31, 2019 and 2018 , capitalized costs related to internal use software, net of accumulated amortization, were $122 and $154 , respectively. Useful lives of our internal use software generally vary from three to seven years |
Investment in Affiliates, at Eq
Investment in Affiliates, at Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Affiliates, at Equity | Investment in Affiliates, at Equity As disclosed in Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 7 - Divestitures, in November 2019 Xerox Holdings sold its remaining indirect 25% equity interest in Fuji Xerox, which had been previously accounted for as an equity method investment. Accordingly, our remaining Investment in Affiliates, at Equity at December 31, 2019 largely consists of several minor investments in entities in the Middle East region. Investments in corporate joint ventures and other companies in which we generally have a 20% to 50% ownership interest were as follows: December 31, 2019 2018 Fuji Xerox (1) $ — $ 1,360 Other (2) 46 43 Investments in affiliates, at equity $ 46 $ 1,403 _____________ (1) Balance at December 31, 2018 reported in Other long-term assets of discontinued operations. (2) Balance at December 31, 2019 and 2018, respectively, reported in Other long-term assets. Our equity in net income of our unconsolidated affiliates was as follows: Year Ended December 31, 2019 2018 2017 Fuji Xerox (1) $ 147 $ 25 $ 102 Other 8 8 13 Total Equity in net income of unconsolidated affiliates $ 155 $ 33 $ 115 _____________ (1) Equity in net income for Fuji Xerox is reported in Income from discontinued operations, net of tax for all years. The equity in net income for Fuji Xerox in 2019 is through the date of sale. Fuji Xerox Fuji Xerox is headquartered in Tokyo and operates in Japan, China, Australia, New Zealand, Vietnam and other areas of the Pacific Rim. Equity in net income of Fuji Xerox is affected by certain adjustments to reflect the deferral of profit associated with intercompany sales. These adjustments may result in recorded equity income that is different from that implied by our (former) 25% ownership interest. In addition, the Equity in net income of Fuji Xerox for the three years ended December 31, 2019 , 2018 and 2017 , includes after-tax restructuring and other charges of $20 , $95 and $10 , respectively. We also received dividends from Fuji Xerox for the three years ended December 31, 2019, 2018 and 2017 , which are reflected as a reduction in our investment upon receipt, of $69 , $23 and $46 , respectively. Summarized financial information for Fuji Xerox is as follows: Through Date of Sale Year Ended December 31, 2019 2018 2017 Summary of Operations Revenues $ 7,667 $ 9,161 $ 9,638 Costs and expenses 6,814 8,880 9,072 Income before income taxes 853 281 566 Income tax expense 258 160 144 Net Income 595 121 422 Less: Net income - noncontrolling interests 3 2 5 Net Income - Fuji Xerox $ 592 $ 119 $ 417 Balance Sheet At Date of Sale December 31, 2018 December 31, 2017 Assets Current assets $ 4,876 $ 4,179 $ 4,315 Long-term assets 3,964 4,034 4,488 Total Assets $ 8,840 $ 8,213 $ 8,803 Liabilities and Equity Short-term debt $ 49 $ 130 $ 428 Other current liabilities 1,932 1,827 2,079 Long-term debt 16 24 76 Other long-term liabilities 514 395 369 Noncontrolling interests 18 30 33 Fuji Xerox shareholders' equity 6,311 5,807 5,818 Total Liabilities and Equity $ 8,840 $ 8,213 $ 8,803 Yen/U.S. Dollar exchange rates used to translate are as follows: Financial Statement Exchange Basis 2019 2018 2017 Summary of Operations Weighted average rate 109.03 110.28 112.14 Balance Sheet Year-end rate 108.83 110.26 112.87 Transactions with Fuji Xerox We have a Technology Agreement with Fuji Xerox whereby we receive royalty payments for their use of our Xerox brand trademark, as well as rights to access our patent portfolio in exchange for access to their patent portfolio. These payments are included in Services, maintenance and rentals revenues in the Consolidated Statements of Income. Refer to Note 27 - Subsequent Events for additional information regarding our Technology Agreement with FX. We also have arrangements with Fuji Xerox whereby we purchase inventory from and sell inventory to Fuji Xerox. Pricing of the transactions under these arrangements is based upon terms the Company believes to be negotiated at arm's length. Our purchase commitments with Fuji Xerox are in the normal course of business and typically have a lead time of three months. In addition, we pay Fuji Xerox and they pay us for unique research and development costs. As disclosed in Note 7 - Divestitures, these agreements will continue after the sale of our Investment in Fuji Xerox. Transactions with Fuji Xerox were as follows: Year Ended December 31, 2019 2018 2017 Royalty revenue earned $ 99 $ 96 $ 103 Inventory purchases from Fuji Xerox 1,337 1,501 1,585 Inventory sales to Fuji Xerox 33 43 58 R&D payments received from Fuji Xerox — 1 1 R&D payments paid to Fuji Xerox 4 8 14 As of December 31, 2019 and 2018 , net amounts due to Fuji Xerox were $353 and $320 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill The following table presents the changes in the carrying amount of goodwill: Total Balance at December 31, 2016 (1) $ 3,778 Foreign currency translation 105 Acquisitions: MT Business 33 Other 11 Divestiture (2) (6 ) Balance at December 31, 2017 $ 3,921 Foreign currency translation (63 ) Balance at December 31, 2018 $ 3,858 Foreign currency translation 28 Acquisitions 14 Balance at December 31, 2019 $ 3,900 _____________ (1) Balance at December 31, 2016 has been reduced by $9 to reflect the allocation of goodwill to the sale of XIP, which is accounted for as a discontinued operation. Refer to Note 7 - Divestitures for additional information regarding this divestiture. (2) Relates to the sale of Xerox Research Centre Europe in Grenoble, France to Naver. Refer to Note 7 - Divestitures for additional information regarding this divestiture. Intangible Assets, Net Net intangible assets were $199 at December 31, 2019 . Intangible assets were comprised of the following: December 31, 2019 December 31, 2018 Weighted Average Amortization Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount Customer relationships 10 years $ 140 $ 86 $ 54 $ 317 $ 263 $ 54 Distribution network 25 years 123 99 24 123 93 30 Trademarks 20 years 258 146 112 260 133 127 Technology and non-compete 12 years 18 9 9 15 6 9 Total Intangible Assets $ 539 $ 340 $ 199 $ 715 $ 495 $ 220 The decrease in the gross carrying amount of customer relationships from December 31, 2018 is due to certain balances being fully amortized at December 31, 2019. Amortization expense related to intangible assets was $45 , $48 , and $53 for the three years ended December 31, 2019 , 2018 and 2017 , respectively. Excluding the impact of additional acquisitions, amortization expense is expected to approximate $36 in 2020 and in 2021 , $32 in 2022 , $30 in 2023 and $18 in 2024 . The decrease from 2023 to 2024 is related to the customer relationships and technology, which will be fully amortized by 2024. |
Restructuring Programs
Restructuring Programs | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Programs | Restructuring Programs We engage in restructuring actions, including Project Own It, as well as other transformation efforts in order to reduce our cost structure and realign it to the changing nature of our business. As part of our efforts to reduce costs, our restructuring actions may also include the off-shoring or outsourcing of certain operations, services and other functions. Restructuring costs include employee severance and related costs, other contractual termination costs and asset impairments that may result from employee reductions, migration of facilities from higher-cost to lower-cost countries, and the consolidation of facilities within countries. In those geographies where we have either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan (on-going benefit arrangements), we recognize employee severance and related costs when they are both probable and reasonably estimable. In the event employees are required to perform future service beyond their minimum retention period, we record severance charges ratably over the remaining service period of those employees. Severance payments made under a one-time benefit arrangement are recorded upon communication to the affected employees. Contractual termination costs, including facility exit costs, are generally recognized when it has been determined that a liability has been incurred. Restructuring activities may include the disposal or abandonment of assets, including leased right-of-use assets, that require an acceleration of depreciation or an impairment charge reflecting the excess of an asset's book value over fair value or other recoveries. The recognition of restructuring costs requires that we make certain judgments and estimates regarding the nature, timing and amount of costs associated with the planned initiative. To the extent our actual results differ from our estimates and assumptions, we may be required to revise the estimated liabilities, requiring the recognition of additional restructuring costs or the reduction of liabilities already recognized. At the end of each reporting period, we evaluate the remaining accrued balances to ensure these balances are properly stated and the utilization of the reserves are for their intended purpose in accordance with developed exit plans. A summary of our restructuring program activity for the three years ended December 31, 2019 , 2018 and 2017 is as follows: Severance and Related Costs Other Contractual Termination Costs (2) Asset Impairments (3)(4) Total Balance at December 31, 2016 $ 104 $ 23 $ — $ 127 Restructuring provision 221 4 7 232 Reversals of prior charges (29 ) (6 ) — (35 ) Net Current Period Charges (1) 192 (2 ) 7 197 Charges against reserve and currency (188 ) (20 ) (7 ) (215 ) Balance at December 31, 2017 $ 108 $ 1 $ — $ 109 Restructuring provision 175 14 — 189 Reversals of prior charges (33 ) — — (33 ) Net Current Period Charges (1) 142 14 — 156 Charges against reserve and currency (156 ) (14 ) — (170 ) Balance at December 31, 2018 $ 94 $ 1 $ — $ 95 Restructuring provision 81 19 61 161 Reversals of prior charges (24 ) (5 ) (5 ) (34 ) Net Current Period Charges (1) 57 14 56 127 Charges against reserve and currency (85 ) (11 ) (56 ) (152 ) Balance at December 31, 2019 $ 66 $ 4 $ — $ 70 _____________ (1) Represents net amount recognized within the Consolidated Statements of Income for the years shown for restructuring and asset impairment charges. (2) Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs. (3) Charges associated with asset impairments represent the write-down of the related assets to their new cost basis and are recorded concurrently with the recognition of the provision. (4) 2019 amounts primarily relate to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $39 for leased right-of-use assets and $22 for owned assets and are net of any potential sublease income or other recovery amounts . The following table summarizes the reconciliation to the Consolidated Statements of Cash Flows: Year Ended December 31, 2019 2018 2017 Charges against reserve and currency $ (152 ) $ (170 ) $ (215 ) Asset impairments 56 — 7 Effects of foreign currency and other non-cash items 3 1 (12 ) Restructuring Cash Payments $ (93 ) $ (169 ) $ (220 ) In connection with our restructuring programs, we also incurred certain related costs as follows: Year Ended December 31, 2019 Retention related severance/bonuses (1) $ 39 Contractual severance costs (2) 43 Consulting and other costs (3) 20 $ 102 _____________ (1) Includes retention related severance and bonuses for employees expected to continue working beyond their minimum retention period before termination. (2) Reflects estimated severance and other related costs we are contractually required to pay on employees transferred (approximately 2,200 ) as part of the shared service arrangement entered into with HCL Technologies. (3) Represents professional support services associated with our business transformation initiatives. Cash payments for restructuring related costs were approximately $65 in 2019 and the reserve at December 31, 2019 was $37 , which is expected to be paid over the next twelve months |
Supplementary Financial Informa
Supplementary Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Financial Information [Abstract] | |
Supplementary Financial Information | Supplementary Financial Information The components of Other assets and liabilities were as follows: December 31, 2019 2018 Other Current Assets Income taxes receivable $ 27 $ 14 Royalties, license fees and software maintenance 25 20 Restricted cash — 1 Prepaid expenses 29 31 Derivative instruments 2 15 Advances and deposits 30 28 Other 88 82 Total Other Current Assets $ 201 $ 191 Other Long-term Assets Income taxes receivable $ 9 $ 8 Prepaid pension costs 451 281 Derivative instruments 1 — Internal use software, net 122 154 Restricted cash 55 63 Debt issuance costs, net 3 4 Customer contract costs, net 176 184 Operating lease right-of-use asset (1) 319 — Deferred compensation plan investments 19 16 Investments in affiliates, at equity (2) 46 43 Other 137 149 Total Other Long-term Assets $ 1,338 $ 902 Accrued Expenses and Other Current Liabilities Income taxes payable $ 7 $ 33 Other taxes payable 79 77 Operating lease obligation (1) 87 — Financing lease obligation (1) 2 — Interest payable 38 41 Restructuring reserves 70 93 Restructuring related costs 37 — Derivative instruments 8 1 Product warranties 6 5 Dividends payable 66 69 Distributor and reseller rebates/commissions 167 158 Unearned income and other revenue deferrals 158 155 Other 259 216 Total Accrued Expenses and Other Current Liabilities $ 984 $ 848 Other Long-term Liabilities Deferred taxes $ 37 $ 51 Income taxes payable 64 18 Operating lease obligation (1) 260 — Finance lease obligation (1) 5 — Environmental reserves 9 9 Restructuring reserves — 2 Other 137 189 Total Other Long-term Liabilities $ 512 $ 269 _____________ (1) 2019 amounts relate to the adoption of ASC 842, Leases effective January 1, 2019. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 2 - Adoption of New Leasing Standard - Lessee for additional information. (2) Refer to Note 12 - Investments in Affiliates, at Equity for additional information. Cash, Cash Equivalents and Restricted Cash Restricted cash amounts were as follows: December 31, 2019 2018 Cash and cash equivalents $ 2,740 $ 1,081 Restricted cash Litigation deposits in Brazil 55 61 Other restricted cash — 3 Total Restricted Cash 55 64 Cash, cash equivalents and restricted cash of continuing operations 2,795 1,145 Cash, cash equivalents and restricted cash of discontinued operations — 3 Cash, cash equivalents and restricted cash $ 2,795 $ 1,148 Restricted cash primarily relates to escrow cash deposits made in Brazil associated with ongoing litigation. As more fully discussed in Note 21 - Contingencies and Litigation, various litigation matters in Brazil require us to make cash deposits to escrow as a condition of continuing the litigation. Restricted cash amounts are classified in our Consolidated Balance Sheets based on when the cash will be contractually or judicially released. Restricted cash was reported in the Consolidated Balance Sheets as follows: December 31, 2019 2018 Other current assets $ — $ 1 Other long-term assets 55 63 Total Restricted cash $ 55 $ 64 Pension and Other Benefit Liabilities December 31, 2019 2018 Pension liabilities (1) $ 1,616 $ 1,386 Accrued compensation liabilities 69 73 Deferred compensation liabilities (2) 22 23 Pension and other benefit liabilities $ 1,707 $ 1,482 __________________________ (1) Refer to Note 19 - Employee Benefit Plans for additional information regarding pension liabilities. (2) As of December 31, 2019 and 2018 , includes amounts measured at fair value on a recurring basis of $18 and $16 , respectively, and amounts for executive deferred compensation of $4 and $7 , respectively. Refer to Note 18 - Fair Value of Financial Assets and Liabilities for additional information regarding deferred compensation liabilities. Summarized Cash Flow Information Summarized cash flow information is as follows: Year Ended December 31, 2019 2018 2017 Provision for receivables $ 49 $ 40 $ 46 Provision for inventory 24 30 27 Provision for product warranty 12 14 15 Depreciation of buildings and equipment 101 148 136 Depreciation and obsolescence of equipment on operating leases 225 249 265 Amortization of internal use software 59 81 65 Amortization of product software — — 4 Amortization of acquired intangible assets 45 48 53 Amortization of customer contract costs (1) 93 100 4 Cost of additions to land, buildings and equipment 41 55 69 Cost of additions to internal use software 24 35 36 Common stock dividends - Xerox Holdings 229 255 274 Preferred stock dividends - Xerox Holdings 14 14 17 Payments to noncontrolling interests 14 17 18 Repurchases related to stock-based compensation - Xerox Holdings 28 9 15 __________________________ (1) Amortization of customer contract costs for the years ended December 31, 2019 and 2018 is reported in (Increase) decrease in other current and long-term assets on the Consolidated Statements of Cash Flows. Refer to Note 4 - Revenue - Contract Costs for additional information. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Short-term borrowings were as follows: December 31, 2019 2018 Current maturities of long-term debt $ 1,049 $ 961 Short-term debt and current portion of long-term debt $ 1,049 $ 961 We classify our debt based on the contractual maturity dates of the underlying debt instruments or as of the earliest put date available to the debt holders. We defer costs associated with debt issuance over the applicable term, or to the first put date in the case of convertible debt or debt with a put feature. These costs are amortized as interest expense in our Consolidated Statements of Income. Long-term debt was as follows: December 31, Stated Rate Weighted Average Interest Rates at December 31, 2019 (1) 2019 2018 Xerox Senior Notes due 2019 $ — $ 406 Senior Notes due 2019 — 554 Senior Notes due 2020 2.80 % 2.50 % 313 313 Senior Notes due 2020 3.50 % 3.47 % 362 362 Senior Notes due 2020 2.75 % 2.67 % 376 375 Senior Notes due 2021 4.50 % 4.54 % 1,062 1,062 Senior Notes due 2022 4.07 % 4.07 % 300 300 Senior Notes due 2023 (2) 4.13 % 3.68 % 1,000 1,000 Senior Notes due 2024 3.80 % 3.84 % 300 300 Senior Notes due 2035 4.80 % 4.84 % 250 250 Senior Notes due 2039 6.75 % 6.78 % 350 350 Subtotal - Notes $ 4,313 $ 5,272 Capital lease obligations (3) $ — $ 9 Principal debt balance $ 4,313 $ 5,281 Unamortized discount (16 ) (25 ) Debt issuance costs (17 ) (25 ) Fair value adjustments (4) Terminated swaps 1 2 Current swaps 1 (3 ) Less: current maturities (1,049 ) (961 ) Total Long-term Debt $ 3,233 $ 4,269 _____________ (1) Represents the weighted average effective interest rate, which includes the effect of discounts and premiums on issued debt. (2) As a result of the downgrade of our debt ratings in December 2018, the original coupon rate of 3.625% increased by 0.50% to 4.125% effective March 15, 2019. (3) As a result of the adoption of ASC 842, Leases effective January 1, 2019, capital lease obligations are reported in Other current and non-current liabilities. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, Note 2 - Adoption of New Leasing Standard - Lessee and Note 15 - Supplementary Financial Information for additional information. (4) Fair value adjustments include the following: (i) fair value adjustments to debt associated with terminated interest rate swaps, which are being amortized to interest expense over the remaining term of the related notes; and (ii) changes in fair value of hedged debt obligations attributable to movements in benchmark interest rates. Hedge accounting requires hedged debt instruments to be reported inclusive of any fair value adjustment. Scheduled principal payments due on our long-term debt for the next five years and thereafter are as follows: 2020 (1) 2021 2022 2023 2024 Thereafter Total $ 1,051 $ 1,062 $ 300 $ 1,000 $ 300 $ 600 $ 4,313 _____________ (1) Long-term debt maturities for 2020 are $0 , $313 , $738 and $0 for the first, second, third and fourth quarters, respectively. Credit Facility We have a $1.8 billion unsecured revolving Credit Facility with a group of lenders, which matures in August 2022 . The Credit Facility includes a $250 letter of credit sub-facility as well as an accordion feature that allows us to increase (from time to time, with willing lenders) the overall size of the facility by $750 . We also have the right to request a one year extension on any anniversary of the restated amendment date. Proceeds from any borrowings under the Credit Facility can be used to provide working capital for the Company and its subsidiaries and for general corporate purposes. The Credit Facility is available, without sublimit, to certain of our qualifying subsidiaries. Our obligations under the Credit Facility are unsecured and are not currently guaranteed by any of our subsidiaries. Any domestic subsidiary that guarantees more than $100 of Xerox Corporation debt must also guaranty our obligations under the Credit Facility. In the event that any of our subsidiaries borrows under the Credit Facility, its borrowings thereunder would be guaranteed by us. At December 31, 2019 and 2018 , we had no outstanding borrowings or letters of credit under the amended and restated Credit Facility. Borrowings under the Credit Facility bear interest at our choice, at either (a) a Base Rate as defined in the new Credit Facility agreement, plus a spread that varies between 0.000% and 0.700% depending on our credit rating at the time of borrowing, or (b) LIBOR plus an all-in spread that varies between 1.000% and 1.700% depending on our credit rating at the time of borrowing. Based on our credit rating as of December 31, 2019 , the applicable all-in spreads for the Base Rate and LIBOR borrowing were 0.375% and 1.375% , respectively. An annual facility fee is payable to each lender in the Credit Facility at a rate that varies between 0.125% and 0.300% depending on our credit rating. Based on our credit rating as of December 31, 2019 the applicable rate is 0.25% . The Credit Facility contains various conditions to borrowing and affirmative, negative and financial maintenance covenants. Certain of the more significant covenants are summarized below: (a) Maximum leverage ratio (a quarterly test that is calculated as principal debt divided by consolidated EBITDA, both as defined in the amended and restated Credit Facility) of 4.25x . (b) Minimum interest coverage ratio (a quarterly test that is calculated as consolidated EBITDA divided by consolidated interest expense, both as defined in the amended and restated Credit Facility) may not be less than 3.00x . (c) Limitations on (i) liens securing debt, (ii) mergers, consolidations and liquidations, (iii) limitations on debt incurred by certain subsidiaries, (iv) sale of all or substantially all our assets, (v) payment restrictions affecting subsidiaries, (vi) non-arm's length transactions with affiliates, (vii) change in nature of business, (viii) actions that may violate OFAC and anti-corruption laws. The Credit Facility contains various events of default that are substantially similar to those included in the prior, 2014 $2.0 billion Credit Facility, the occurrence of which could result in termination of the lenders' commitments to lend and the acceleration of all our obligations under the amended and restated Credit Facility. These events of default include, without limitation: (i) payment defaults, (ii) breaches of covenants under the amended and restated Credit Facility (certain of which breaches do not have any grace period), (iii) cross-defaults and acceleration to certain of our other obligations and (iv) a change of control of Xerox Holdings. On July 31, 2019, Xerox completed the Reorganization, pursuant to which Xerox became a direct, wholly-owned subsidiary of Xerox Holdings. In connection with the Reorganization, Xerox Holdings became a guarantor of Xerox’s existing Credit Facility. Commercial Paper Xerox terminated its $1.8 billion commercial paper (CP) program in the U.S. in March of 2019. No borrowings were made under this program during 2019 prior to its termination. Interest Interest paid on our short-term and long-term debt amounted to $221 , $231 and $268 for the years ended December 31, 2019 , 2018 and 2017 , respectively. Interest expense and interest income was as follows: Year Ended December 31, 2019 2018 2017 Interest expense (1) $ 236 $ 244 $ 252 Interest income (2) 260 283 302 _____________ (1) Includes Equipment financing interest expense, as well as non-financing interest expense included in Other expenses, net in the Consolidated Statements of Income. (2) Includes Finance income, as well as other interest income that is included in Other expenses, net in the Consolidated Statements of Income. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments We are exposed to market risk from changes in foreign currency exchange rates and interest rates, which could affect operating results, financial position and cash flows. We manage our exposure to these market risks through our regular operating and financing activities and, when appropriate, through the use of derivative financial instruments. These derivative financial instruments are utilized to hedge economic exposures, as well as to reduce earnings and cash flow volatility resulting from shifts in market rates. We enter into limited types of derivative contracts, including interest rate swap agreements, foreign currency spot, forward and swap contracts and net purchased foreign currency options to manage interest rate and foreign currency exposures. Our primary foreign currency market exposures include the Japanese Yen, Euro and U.K. Pound Sterling. The fair market values of all our derivative contracts change with fluctuations in interest rates and/or currency exchange rates and are designed so that any changes in their values are offset by changes in the values of the underlying exposures. Derivative financial instruments are held solely as risk management tools and not for trading or speculative purposes. The related cash flow impacts of all of our derivative activities are reflected as cash flows from operating activities. We do not believe there is significant risk of loss in the event of non-performance by the counterparties associated with our derivative instruments because these transactions are executed with a diversified group of major financial institutions. Further, our policy is to deal only with counterparties having a minimum investment grade or better credit rating. Credit risk is managed through the continuous monitoring of exposures to such counterparties. Interest Rate Risk Management We use interest rate swap agreements to manage our interest rate exposure and to achieve a desired proportion of variable and fixed rate debt. These derivatives may be designated as fair value hedges or cash flow hedges depending on the nature of the risk being hedged. Terminated Swaps During the period from 2004 to 2011, we early terminated several interest rate swaps that were designated as fair value hedges of certain debt instruments. The associated net fair value adjustments to the debt instruments are being amortized to interest expense over the remaining term of the related notes. In 2019 , 2018 and 2017 , the amortization of these fair value adjustments reduced interest expense by $1 , $3 and $13 , respectively. The remaining unamortized gain balance associated with these terminated swaps was $1 at December 31, 2019 . Fair Value Hedges As of December 31, 2019 and 2018 , pay variable/received fixed interest rate swaps with notional amounts of $200 and $300 , respectively, and net asset (liability) fair value of $1 and $(3) , respectively, were designated and accounted for as fair value hedges. The decrease in the notional amount reflects the early termination of an interest rate swap with a $100 notional amount in 2019. The fair value associated with the terminated swap was immaterial at the time of termination. The swaps are structured to hedge the fair value of related debt by converting them from fixed rate instruments to variable rate instruments. No ineffective portion was recorded to earnings for the three years ended December 31, 2019 . The following is a summary of our fair value hedges at December 31, 2019 : Debt Instrument Year First Designated Notional Amount Net Fair Value Weighted Average Interest Rate Paid Interest Rate Received Basis Maturity Senior Note 2021 2014 $ 200 $ 1 3.35 % 4.50 % Libor 2021 Foreign Exchange Risk Management We are a global company and we are exposed to foreign currency exchange rate fluctuations in the normal course of our business. As a part of our foreign exchange risk management strategy, we use derivative instruments, primarily forward contracts and purchased option contracts, to hedge the following foreign currency exposures, thereby reducing volatility of earnings or protecting fair values of assets and liabilities: • Foreign currency-denominated assets and liabilities • Forecasted purchases, and sales in foreign currency At December 31, 2019 , we had outstanding forward exchange contracts with gross notional values of $1,091 , with terms of less than 12 months. Approximately 82% of these contracts at December 31, 2019 mature within three months, 9% in three to six months and 9% in six to twelve months. The following is a summary of the primary hedging positions and corresponding fair values as of December 31, 2019 : Currencies Hedged (Buy/Sell) Gross Notional Value Fair Value Asset (1) Japanese Yen/U.S. Dollar $ 369 $ (2 ) Japanese Yen/Euro 264 (3 ) U.S. Dollar/Euro 122 — Euro/U.S. Dollar 71 — Euro/U.K. Pound Sterling 64 — U.S. Dollar/Canadian Dollar 50 (1 ) Euro/Danish Krone 29 — U.K. Pound Sterling/Euro 27 — U.S. Dollar/Russian Ruble 22 (1 ) U.S. Dollar/Japanese Yen 14 — Euro/Swiss Franc 12 — U.S. Dollar/Israeli Shekel 9 — All Other 38 1 Total Foreign exchange hedging $ 1,091 $ (6 ) ____________ (1) Represents the net receivable (payable) amount included in the Consolidated Balance Sheet at December 31, 2019 . Foreign Currency Cash Flow Hedges We designate a portion of our foreign currency derivative contracts as cash flow hedges of our foreign currency-denominated inventory purchases, sales and expenses. No amount of ineffectiveness was recorded in the Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or loss was included in the assessment of hedge effectiveness. The net (liability) asset fair value of these contracts were $(4) and $8 as of December 31, 2019 and 2018 , respectively. Summary of Derivative Instruments Fair Value The following table provides a summary of the fair value amounts of our derivative instruments: December 31, Designation of Derivatives Balance Sheet Location 2019 2018 Derivatives Designated as Hedging Instruments Foreign exchange contracts – forwards Other current assets $ 1 $ 7 Accrued expensed and other current liabilities (5 ) — Foreign currency options Other current assets — 1 Interest rate swaps Other long-term assets 1 — Other long-term liabilities — (3 ) Net Designated Derivative (Liability) Asset $ (3 ) $ 5 Derivatives NOT Designated as Hedging Instruments Foreign exchange contracts – forwards Other current assets $ 1 $ 7 Accrued expensed and other current liabilities (3 ) (1 ) Net Undesignated Derivative (Liability) Asset $ (2 ) $ 6 Summary of Derivatives Total Derivative Assets $ 3 $ 15 Total Derivative Liabilities (8 ) (4 ) Net Derivative (Liability) Asset $ (5 ) $ 11 Summary of Derivative Instruments Gains (Losses) Derivative gains and (losses) affect the income statement based on whether such derivatives are designated as hedges of underlying exposures. The following is a summary of derivative gains and (losses). Designated Derivative Instruments Gains (Losses) The following tables provide a summary of gains (losses) on derivative instruments: Year Ended December 31, Derivatives in Fair Value Relationships Location of Gain (Loss) Recognized in Income Derivative Gain (Loss) Recognized in Income Hedged Item (Loss) Gain Recognized in Income 2019 2018 2017 2019 2018 2017 Interest rate contracts Interest expense $ 4 $ (3 ) $ (3 ) $ (4 ) $ 3 $ 3 Year Ended December 31, Derivatives in Cash Flow Hedging Relationships Derivative Gain (Loss) Recognized in OCI (Effective Portion) Location of Derivative Gain (Loss) Reclassified from AOCI into Income (Effective Portion) Gain (Loss) Reclassified from AOCI to Income (Effective Portion) 2019 2018 2017 2019 2018 2017 Foreign exchange contracts – forwards/options $ 2 $ 9 $ (28 ) Cost of sales $ 9 $ (14 ) $ (35 ) For the three years ended December 31, 2019 no amount of ineffectiveness was recorded in the Consolidated Statements of Income for these designated cash flow hedges. All components of each derivative’s gain or (loss) were included in the assessment of hedge effectiveness. In addition, no amount was recorded for an underlying exposure that did not occur or was not expected to occur. At December 31, 2019 , a net after-tax loss of $2 was recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity. The entire balance is expected to be reclassified into Net income within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions. Non-Designated Derivative Instruments Gains (Losses) Non-designated derivative instruments are primarily instruments used to hedge foreign currency-denominated assets and liabilities. They are not designated as hedges since there is a natural offset for the remeasurement of the underlying foreign currency-denominated asset or liability. The following table provides a summary of gains (losses) on non-designated derivative instruments: Year Ended December 31, Derivatives NOT Designated as Hedging Instruments Location of Derivative Gain (Loss) 2019 2018 2017 Foreign exchange contracts – forwards Other expense – Currency (losses) gains, net $ (6 ) $ 21 $ (44 ) For the three years ended December 31, 2019 , 2018 and 2017, we recorded Currency losses, net of $7 , $5 and $4 , respectively. Net currency gains and losses include the mark-to-market adjustments of the derivatives not designated as hedging instruments and the related cost of those derivatives, as well as the remeasurement of foreign currency-denominated assets and liabilities and are included in Other expenses, net. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities The following table represents assets and liabilities fair value measured on a recurring basis. The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs. As of December 31, 2019 2018 Assets Foreign exchange contracts - forwards $ 2 $ 14 Foreign currency options — 1 Interest rate swaps 1 — Deferred compensation investments in mutual funds 19 16 Total $ 22 $ 31 Liabilities Foreign exchange contracts - forwards $ 8 $ 1 Interest rate swaps — 3 Deferred compensation plan liabilities 18 16 Total $ 26 $ 20 We utilize the income approach to measure the fair value for our derivative assets and liabilities. The income approach uses pricing models that rely on market observable inputs such as yield curves, currency exchange rates and forward prices, and therefore are classified as Level 2. Fair value for our deferred compensation plan investments in mutual funds is based on quoted market prices for those funds. Fair value for deferred compensation plan liabilities is based on the fair value of investments corresponding to employees’ investment selections. Summary of Other Financial Assets and Liabilities The estimated fair values of our other financial assets and liabilities were as follows: December 31, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 2,740 $ 2,740 $ 1,081 $ 1,081 Accounts receivable, net 1,236 1,236 1,270 1,270 Short-term debt and current portion of long-term debt 1,049 1,054 961 966 Long-term debt 3,233 3,331 4,269 3,922 The fair value amounts for Cash and cash equivalents and Accounts receivable, net, approximate carrying amounts due to the short maturities of these instruments. The fair value of Short-term debt, including the current portion of long-term debt, and Long-term debt was estimated based on the current rates offered to us for debt of similar maturities (Level 2). The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at such date. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Defined Benefit Plan [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We sponsor numerous defined benefit and defined contribution pension and other post-retirement benefit plans, primarily retiree health care, in our domestic and international operations. December 31 is the measurement date for all of our post-retirement benefit plans. Over the past several years, where legally possible, we have amended our major defined benefit pension plans to freeze current benefits and eliminate benefits accruals for future service, including our primary U.S. defined benefit plan for salaried employees, the Canadian Salary Pension Plan and the U.K. Final Salary Pension Plan. The freeze of current benefits is the primary driver of the reduction in pension service costs since 2012. In certain Non-U.S. plans, we are required to continue to consider salary increases and inflation in determining the benefit obligation related to prior service. The Netherlands defined benefit pension plan has also been amended to reflect the Company's ability to reduce the indexation of future pension benefits within the plan in scenarios when the returns on plan assets are insufficient to cover that indexation. Prior to the freeze of current benefits, most of our defined benefit pension plans generally provided employees a benefit, depending on eligibility, calculated under a highest average pay and years of service formula. Our primary domestic defined benefit pension plans provided a benefit at the greater of (i) the highest average pay and years of service formula, (ii) the benefit calculated under a formula that provides for the accumulation of salary and interest credits during an employee's work life or (iii) the individual account balance from the Company's prior defined contribution plan (Transitional Retirement Account or TRA). Pension plan assets consist of both defined benefit plan assets and assets legally restricted to the TRA accounts. The combined investment results for our primary domestic plans, along with the results for our other defined benefit plans, are shown below in the “actual return on plan assets” caption. To the extent that investment results relate to TRA assets, such results are charged directly to these accounts as a component of interest cost. Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health 2019 2018 2019 2018 2019 2018 Change in Benefit Obligation: Benefit obligation, January 1 $ 3,234 $ 4,180 $ 6,007 $ 6,703 $ 385 $ 723 Service cost 2 2 22 27 2 4 Interest cost 218 63 153 149 15 23 Plan participants' contributions — — 3 4 10 3 Actuarial loss (gain) 564 (288 ) 472 (293 ) 8 (63 ) Currency exchange rate changes — — 114 (339 ) 5 (11 ) Plan Amendments/Curtailments — — (2 ) 41 — (234 ) Benefits paid/settlements (420 ) (723 ) (270 ) (281 ) (40 ) (60 ) Other — — (7 ) (4 ) — — Benefit Obligation, December 31 $ 3,598 $ 3,234 $ 6,492 $ 6,007 $ 385 $ 385 Change in Plan Assets: Fair value of plan assets, January 1 $ 2,358 $ 3,224 $ 5,729 $ 6,308 $ — $ — Actual return on plan assets 529 (170 ) 680 (85 ) — — Employer contributions 26 27 115 117 30 57 Plan participants' contributions — — 3 4 10 3 Currency exchange rate changes — — 135 (329 ) — — Benefits paid/settlements (420 ) (723 ) (270 ) (281 ) (40 ) (60 ) Other — — (7 ) (5 ) — — Fair Value of Plan Assets, December 31 $ 2,493 $ 2,358 $ 6,385 $ 5,729 $ — $ — Net Funded Status at December 31 (1) $ (1,105 ) $ (876 ) $ (107 ) $ (278 ) $ (385 ) $ (385 ) Amounts Recognized in the Consolidated Balance Sheets: Other long-term assets $ — $ — $ 451 $ 281 $ — $ — Accrued compensation and benefit costs (25 ) (25 ) (22 ) (24 ) (33 ) (35 ) Pension and other benefit liabilities (1,080 ) (851 ) (536 ) (535 ) — — Post-retirement medical benefits — — — — (352 ) (350 ) Net Amounts Recognized $ (1,105 ) $ (876 ) $ (107 ) $ (278 ) $ (385 ) $ (385 ) Accumulated Benefit Obligation $ 3,598 $ 3,234 $ 6,326 $ 5,847 _____________ (1) Includes under-funded and unfunded plans. Benefit plans pre-tax amounts recognized in AOCL at December 31: Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health 2019 2018 2019 2018 2019 2018 Net actuarial loss (gain) $ 1,059 $ 933 $ 1,462 $ 1,457 $ (29 ) $ (42 ) Prior service (credit) cost (3 ) (5 ) 22 19 (164 ) (240 ) Total Pre-tax loss (gain) $ 1,056 $ 928 $ 1,484 $ 1,476 $ (193 ) $ (282 ) Aggregate information for pension plans with an Accumulated benefit obligation in excess of plan assets is presented below. Information for Retiree Health plans with an accumulated post-retirement benefit obligation in excess of plan assets has been disclosed in the preceding table on Benefit obligations and Net funded status as all Retiree Health plans are unfunded. December 31, 2019 December 31, 2018 Accumulated Benefit Obligation Fair Value of Plan Assets Accumulated Benefit Obligation Fair Value of Plan Assets Underfunded Plans: U.S. $ 3,261 $ 2,493 $ 2,918 $ 2,358 Non U.S. 767 697 713 624 Unfunded Plans: U.S. $ 337 $ — $ 316 $ — Non U.S. 469 — 446 — Total Underfunded and Unfunded Plans: U.S. $ 3,598 $ 2,493 $ 3,234 $ 2,358 Non U.S. 1,236 697 1,159 624 Total $ 4,834 $ 3,190 $ 4,393 $ 2,982 Aggregate information for pension plans with a benefit obligation in excess of plan assets is presented below: December 31, 2019 December 31, 2018 Benefit Obligation Fair Value of Plan Assets Benefit Obligation Fair Value of Plan Assets Underfunded Plans: U.S. $ 3,261 $ 2,493 $ 2,918 $ 2,358 Non U.S. 780 697 888 782 Unfunded Plans: U.S. $ 337 $ — $ 316 $ — Non U.S. 479 — 456 — Total Underfunded and Unfunded Plans: U.S. $ 3,598 $ 2,493 $ 3,234 $ 2,358 Non U.S. 1,259 697 1,344 782 Total $ 4,857 $ 3,190 $ 4,578 $ 3,140 Our pension plan assets and benefit obligations at December 31, 2019 were as follows: Fair Value of Pension Plan Assets Pension Benefit Obligations Net Funded Status U.S. funded $ 2,493 $ 3,261 $ (768 ) U.S. unfunded — 337 (337 ) Total U.S. 2,493 3,598 (1,105 ) U.K. 4,169 3,798 371 Netherlands 1,083 1,101 (18 ) Canada 721 738 (17 ) Germany — 367 (367 ) Other 412 488 (76 ) Total $ 8,878 $ 10,090 $ (1,212 ) The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows: Year Ended December 31, Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health 2019 2018 2017 2019 2018 2017 2019 2018 2017 Components of Net Periodic Benefit Costs: Service cost $ 2 $ 2 $ 2 $ 22 $ 27 $ 29 $ 2 $ 4 $ 5 Interest cost (1) 218 63 226 153 149 158 15 23 28 Expected return on plan assets (2) (210 ) (67 ) (227 ) (233 ) (244 ) (221 ) — — — Recognized net actuarial loss (gain) 24 22 21 43 56 79 (5 ) — 1 Amortization of prior service credit (2 ) (2 ) (2 ) (2 ) (4 ) (4 ) (77 ) (19 ) (4 ) Recognized settlement loss 93 173 133 1 1 2 — — — Recognized curtailment gain — — — — (1 ) (2 ) — — — Defined Benefit Plans 125 191 153 (16 ) (16 ) 41 (65 ) 8 30 Defined contribution plans 26 37 38 23 29 29 n/a n/a n/a Net Periodic Benefit Cost (Credit) 151 228 191 7 13 70 (65 ) 8 30 Other changes in plan assets and benefit obligations recognized in Other Comprehensive (Loss) Income: Net actuarial loss (gain) (3) 243 (50 ) 238 24 33 (273 ) 8 (63 ) (16 ) Prior service cost (credit) — — — — 41 (1 ) — (234 ) — Amortization of net actuarial (loss) gain (117 ) (195 ) (154 ) (44 ) (57 ) (81 ) 5 — (1 ) Amortization of net prior service credit 2 2 2 2 4 4 77 19 4 Curtailment gain — — — — 1 — — — — Total Recognized in Other Comprehensive (Loss) Income (4) 128 (243 ) 86 (18 ) 22 (351 ) 90 (278 ) (13 ) Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income $ 279 $ (15 ) $ 277 $ (11 ) $ 35 $ (281 ) $ 25 $ (270 ) $ 17 _____________ (1) Interest cost for Pension Benefits includes interest expense on non-TRA obligations of $243 , $258 and $257 and interest expense (income) directly allocated to TRA participant accounts of $128 , $(46) and $127 for the years ended December 31, 2019 , 2018 and 2017 , respectively. (2) Expected return on plan assets includes expected investment income on non-TRA assets of $315 , $357 and $321 and actual investment (loss) income on TRA assets of $128 , $(46) and $127 for the years ended December 31, 2019 , 2018 and 2017 , respectively. (3) The non-U.S. plans Net actuarial (gain) loss for 2018 reflects an out-of-period adjustment in third quarter 2018 of $(53) to correct an overstated benefit obligation for our U.K. Final Salary Pension Plan at December 31, 2017. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information regarding this adjustment. (4) Amounts represent the pre-tax effect included in Other comprehensive (loss) income. Refer to Note 25 - Other Comprehensive (Loss) Income for the related tax effects and the net of tax amounts. Plan Amendments Pension: On October 26, 2018, the High Court of Justice in the United Kingdom (the High Court) ruled that Lloyds Bank PLC was required to equalize benefits payable to men and women under its U.K. defined benefit pension plans by amending those plans to increase the pension benefits payable to participants that accrued such benefits during the period from 1990 to 1997. The inequalities arose from statutory differences in the retirement ages and rates of accrual of benefits for men and women related to Guaranteed Minimum Pension (GMP) benefits that are included in U.K. defined benefit pension plans. Based on the above ruling, we currently estimate the cost of equalization under the minimum cost approach permitted by the High Court’s ruling to be approximately 1.2% of our U.K. defined benefit plan obligation at December 31, 2018 or approximately GBP 33 million (approximately USD $42 ). This increase in the benefit obligation was recorded as a plan amendment in 2018 and will be amortized as prior service cost over 24 years (approximately USD $2 per year) through 2019 and future years’ Net periodic benefit costs. The amount recorded continues to reflect our best estimate of the impact from this ruling. However, several significant uncertainties remain and therefore our estimate is subject to future change and adjustment. In particular, the cost is very sensitive to i) the method of GMP equalization; ii) actuarial assumptions and market conditions; iii) the benefit structure of our plan and operational practices; and iv) the demographic profile of our plan. In addition, we are continuing to evaluate the acceptable methodologies that the High Court has determined, and we still need to agree upon the appropriate methodology with our plan trustees. Retiree Health Plans: In December 2018, we amended our Canadian Retiree Health Plan to eliminate coverage for certain future and existing retirees. This negative plan amendment resulted in a reduction in the postretirement benefit obligation of $19 , which is expected to be amortized to future net periodic benefit costs as a prior service credit. In October 2018, we amended our U.S. Retiree Health Plan effective January 1, 2019, to reduce certain benefits for existing non-union retirees through the reduction or elimination of coverage or cost-sharing subsidies for retiree health care and life insurance costs. This negative plan amendment resulted in a reduction in the postretirement benefit obligation of $283 , which consisted of $216 for the plan amendment and an actuarial gain of $67 related to the required plan remeasurement upon amendment. The amount for the plan amendment is expected to be amortized to future net periodic benefit costs as a prior service credit. Plan Assets Current Allocation As of the 2019 and 2018 measurement dates, the global pension plan assets were $8,878 and $8,087 , respectively. These assets were invested among several asset classes. The following tables present the defined benefit plans assets measured at fair value and the basis for that measurement. December 31, 2019 U.S. Plans Non-U.S. Plans Asset Class Level 1 Level 2 Level 3 Assets measured at NAV (1) Total Level 1 Level 2 Level 3 Assets measured at NAV (1) Total Cash and cash equivalents $ 9 $ — $ — $ — $ 9 $ 421 $ — $ — $ — $ 421 Equity Securities: U.S. 182 — — 39 221 132 52 — — 184 International 193 — — 191 384 462 302 — 118 882 Fixed Income Securities: U.S. treasury securities — 316 — — 316 — 47 — — 47 Debt security issued by government agency — 67 — — 67 — 1,825 — — 1,825 Corporate bonds — 1,119 — — 1,119 — 841 — — 841 Derivatives — 45 — — 45 — 186 — — 186 Real estate — — 5 10 15 — — 219 116 335 Private equity/venture capital — — — 199 199 — — 5 1,527 1,532 Guaranteed insurance contracts — — — — — — — 90 — 90 Other (2)(3) (36 ) — — 154 118 11 31 — — 42 Total Fair Value of Plan Assets $ 348 $ 1,547 $ 5 $ 593 $ 2,493 $ 1,026 $ 3,284 $ 314 $ 1,761 $ 6,385 _____________ (1) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. (2) Other NAV includes mutual funds of $76 (measured at NAV) which are invested approximately 75% in fixed income securities and approximately 25% in equity securities. (3) Other Level 1 includes net non-financial (liabilities) assets of $(36) U.S. and $11 Non-U.S., respectively, such as due to/from broker, interest receivables and accrued expenses. December 31, 2018 U.S. Plans Non-U.S. Plans Asset Class Level 1 Level 2 Level 3 Assets measured at NAV (1) Total Level 1 Level 2 Level 3 Assets measured at NAV (1) Total Cash and cash equivalents $ 1 $ — $ — $ — $ 1 $ 370 $ — $ — $ — $ 370 Equity Securities: U.S. 82 — — 35 117 103 42 — — 145 International 97 — — 52 149 359 111 — 112 582 Fixed Income Securities: U.S. treasury securities — 248 — — 248 — 57 — — 57 Debt security issued by government agency — 81 — — 81 — 1,861 — — 1,861 Corporate bonds — 1,363 — — 1,363 — 736 — — 736 Derivatives — (26 ) — — (26 ) — 99 — — 99 Real estate 19 — — 9 28 — — 210 157 367 Private equity/venture capital — — — 353 353 — — 6 1,386 1,392 Guaranteed insurance contracts — — — — — — — 92 — 92 Other (2) 12 — — 32 44 5 23 — — 28 Total Fair Value of Plan Assets $ 211 $ 1,666 $ — $ 481 $ 2,358 $ 837 $ 2,929 $ 308 $ 1,655 $ 5,729 _____________ (1) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. (2) Other Level 1 includes net non-financial (liabilities) assets of $12 U.S. and $5 Non-U.S., respectively, such as due to/from broker, interest receivables and accrued expenses. The following tables represents a roll-forward of the defined benefit plans assets measured at fair value using significant unobservable inputs (Level 3 assets): U.S. Non-U.S. Real Estate Real Estate Private Equity/Venture Capital Guaranteed Insurance Contracts Total Balance at December 31, 2017 $ — $ 137 $ 7 $ 100 $ 244 Purchases — 22 — 1 23 Sales — (1 ) — (6 ) (7 ) Realized losses (4 ) — — — — Unrealized gains (losses) 4 62 (4 ) — 58 Currency translation — (10 ) 3 (3 ) (10 ) Balance at December 31, 2018 $ — $ 210 $ 6 $ 92 $ 308 Purchases 5 — — 2 2 Sales — — (5 ) (4 ) (9 ) Unrealized gains — 9 4 2 15 Currency translation — — — (2 ) (2 ) Balance at December 31, 2019 $ 5 $ 219 $ 5 $ 90 $ 314 Level 3 Valuation Method Our primary Level 3 assets are Real Estate and Private Equity/Venture Capital investments. The fair value of our real estate investment funds are based on the Net Asset Value (NAV) of our ownership interest in the funds. NAV information is received from the investment advisers and is primarily derived from third-party real estate appraisals for the properties owned. The fair value for our private equity/venture capital partnership investments are based on our share of the estimated fair values of the underlying investments held by these partnerships as reported (or expected to be reported) in their audited financial statements. The valuation techniques and inputs for our Level 3 assets have been consistently applied for all periods presented. Investment Strategy The target asset allocations for our worldwide defined benefit pension plans were: 2019 2018 U.S. Non-U.S. U.S. Non-U.S. Equity investments 23% 14% 12% 13% Fixed income investments 61% 46% 73% 46% Real estate 6% 5% 3% 6% Private equity/venture capital 8% 24% 6% 24% Other 2% 11% 6% 11% Total Investment Strategy 100% 100% 100% 100% We employ a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. The intent of this strategy is to minimize plan expenses by exceeding the interest growth in long-term plan liabilities. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. This consideration involves the use of long-term measures that address both return and risk. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value and small and large capitalizations. Other assets such as real estate, private equity, and hedge funds are used to improve portfolio diversification. Derivatives may be used to hedge market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risks and returns are measured and monitored on an ongoing basis through annual liability measurements and quarterly investment portfolio reviews. Expected Long-term Rate of Return We employ a “building block” approach in determining the long-term rate of return for plan assets. Historical markets are studied and long-term relationships between equities and fixed income are assessed. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio return is established giving consideration to investment diversification and rebalancing. Peer data and historical returns are reviewed periodically to assess reasonableness and appropriateness. Contributions The following table summarizes cash contributions to our defined benefit pension plans and retiree health benefit plans. Year Ended December 31, 2019 Estimated 2020 U.S. Plans $ 26 $ 25 Non-U.S. Plans 115 110 Total $ 141 $ 135 Retiree Health $ 30 $ 35 The 2019 U.S. pension plan contributions did no t include any contributions for our domestic tax-qualified defined benefit plans because none were required to meet the minimum funding requirements. There are no contributions required in 2020 for our U.S. tax-qualified defined benefit plans to meet the minimum funding requirements. Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following years: Pension Benefits U.S. Non-U.S. Total Retiree Health 2020 $ 480 $ 266 $ 746 $ 35 2021 262 272 534 32 2022 269 277 546 31 2023 272 283 555 29 2024 264 289 553 28 Years 2025-2029 1,198 1,526 2,724 118 Assumptions Weighted-average assumptions used to determine benefit obligations at the plan measurement dates: Pension Benefits 2019 2018 2017 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Discount rate 3.1 % 1.8 % 4.2 % 2.6 % 3.6 % 2.3 % Rate of compensation increase 0.2 % 2.6 % 0.2 % 2.6 % 0.2 % 2.6 % Interest crediting rate 2.8 % 1.5 % 2.8 % 1.5 % 2.8 % 1.5 % Retiree Health 2019 2018 2017 Discount rate 3.0 % 4.1 % 3.5 % Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31: Pension Benefits 2020 2019 2018 2017 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Discount rate 3.1 % 1.8 % 4.2 % 2.6 % 3.6 % 2.3 % 4.0 % 2.5 % Expected return on plan assets 6.0 % 3.3 % 6.0 % 4.0 % 5.8 % 3.8 % 7.0 % 4.1 % Rate of compensation increase 0.2 % 2.6 % 0.2 % 2.6 % 0.2 % 2.6 % 0.2 % 2.6 % Interest crediting rate 2.8 % 1.5 % 2.8 % 1.5 % 2.8 % 1.5 % 2.8 % 1.5 % Retiree Health 2020 2019 2018 2017 Discount rate 3.0 % 4.1 % 3.5 % 3.9 % _____________ Note: Expected return on plan assets is not applicable to retiree health benefits as these plans are not funded. Rate of compensation increase is not applicable to retiree health benefits as compensation levels do not impact earned benefits. Assumed health care cost trend rates were as follows: December 31, 2019 2018 Health care cost trend rate assumed for next year 6.0 % 6.3 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.3 % 4.7 % Year that the rate reaches the ultimate trend rate 2026 2025 Defined Contribution Plans We have post-retirement savings and investment plans in several countries, including the U.S., the U.K. and Canada. In many instances, employees who participated in the defined benefit pension plans that have been amended to freeze future service accruals were transitioned to an enhanced defined contribution plan. In these plans employees are allowed to contribute a portion of their salaries and bonuses to the plans, and we match a portion of the employee contributions. We recorded charges related to our defined contribution plans of $49 in 2019 , $66 in 2018 and $67 in 2017 |
Income and Other Taxes
Income and Other Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income and Other Taxes | Income and Other Taxes Income before income taxes and equity income (pre-tax income) from continuing operations was as follows: Year Ended December 31, 2019 2018 2017 Domestic income $ 679 $ 331 $ 354 Foreign income 143 218 171 Income before Income Taxes and Equity Income $ 822 $ 549 $ 525 The components of Income tax expense from continuing operations were as follows: Year Ended December 31, 2019 2018 2017 Federal Income Taxes Current $ (3 ) $ 37 $ (12 ) Deferred 98 83 411 Foreign Income Taxes Current 43 46 62 Deferred 5 57 (21 ) State Income Taxes Current 15 29 19 Deferred 21 (5 ) 9 Income Tax Expense $ 179 $ 247 $ 468 A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate was as follows: Year Ended December 31, 2019 2018 2017 U.S. federal statutory income tax rate 21.0 % 21.0 % 35.0 % Nondeductible expenses 1.3 % 3.7 % 1.3 % Effect of tax law changes (4.6 )% 14.5 % 76.2 % Change in valuation allowance for deferred tax assets 2.0 % 0.6 % 1.1 % State taxes, net of federal benefit 3.5 % 2.3 % 3.6 % Audit and other tax return adjustments 0.6 % (1.8 )% (9.4 )% Tax-exempt income, credits and incentives (2.1 )% (2.2 )% (3.2 )% Foreign rate differential adjusted for U.S. taxation of foreign profits (1) 0.1 % 4.8 % (16.5 )% Other — % 2.1 % 1.0 % Effective Income Tax Rate 21.8 % 45.0 % 89.1 % _____________ (1) The “U.S. taxation of foreign profits” represents the U.S. tax, net of foreign tax credits, associated with actual and deemed repatriations of earnings from our non-U.S. subsidiaries. On a consolidated basis, including discontinued operations, we paid a total of $94 , $80 and $84 in income taxes to federal, foreign and state jurisdictions during the three years ended December 31, 2019 , 2018 and 2017 , respectively. Total income tax expense (benefit) was allocated to the following items: Year Ended December 31, 2019 2018 2017 Pre-tax income $ 179 $ 247 $ 468 Discontinued operations (1) 95 10 1 Common shareholders' equity: Changes in defined benefit plans (55 ) 131 63 Cash flow hedges (1 ) 5 5 Translation adjustments 8 (9 ) 1 Retained Earnings — 36 — Total Income Tax Expense $ 226 $ 420 $ 538 _____________ (1) Refer to Note 7 - Divestitures for additional information regarding discontinued operations. Unrecognized Tax Benefits and Audit Resolutions We recognize tax liabilities when, despite our belief that our tax return positions are supportable, we believe that certain positions may not be fully sustained upon review by tax authorities. Each period, we assess uncertain tax positions for recognition, measurement and effective settlement. Benefits from uncertain tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement - the more-likely-than-not recognition threshold. Where we have determined that our tax return filing position does not satisfy the more likely than not recognition threshold, we have recorded no tax benefits. We are also subject to ongoing tax examinations in numerous jurisdictions due to the extensive geographical scope of our operations. Our ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can increase or decrease our effective tax rate, as well as impact our operating results. The specific timing of when the resolution of each tax position will be reached is uncertain. As of December 31, 2019 , we do not believe that there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2019 2018 2017 Balance at January 1 $ 108 $ 125 $ 165 Additions related to current year 42 2 1 Additions related to prior years positions 17 3 10 Reductions related to prior years positions (36 ) (13 ) (46 ) Settlements with taxing authorities (1) (1 ) (6 ) (5 ) Reductions related to lapse of statute of limitations (3 ) (3 ) (3 ) Currency — — 3 Balance at December 31 $ 127 $ 108 $ 125 _____________ (1) The majority of settlements did not result in the utilization of cash. Included in the balances at December 31, 2019 , 2018 and 2017 are $3 , $8 and $8 , respectively, of tax positions that are highly certain of realizability but for which there is uncertainty about the timing or that they may be reduced through an indirect benefit from other taxing jurisdictions. Because of the impact of deferred tax accounting, other than for the possible incurrence of interest and penalties, the disallowance of these positions would not affect the annual effective tax rate. Within income tax expense, we recognize interest and penalties accrued on unrecognized tax benefits, as well as interest received from favorable settlements. We had $2 , $2 and $5 accrued for the payment of interest and penalties associated with unrecognized tax benefits at December 31, 2019 , 2018 and 2017 , respectively. In the U.S., we are no longer subject to U.S. federal income tax examinations for years before 2015. With respect to our major foreign jurisdictions, we are no longer subject to tax examinations by tax authorities for years before 2011. Tax Cuts and Jobs Act (the Tax Act) On December 22, 2017, the Tax Cuts and Jobs Act (the Tax Act) was enacted. The Tax Act significantly revised the U.S. corporate income tax system by, among other things, lowering the U.S. statutory corporate income tax rate from 35% to 21% and implementing a territorial tax system that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. We recorded the following charges (credits) to Income tax expense associated with the Tax Act: Year Ended December 31, 2019 2018 2017 Total Tax Act Impacts $ (35 ) $ 89 $ 400 $ 454 The net charge of $454 included the following components: Foreign tax effects: The deemed repatriation tax associated with the Tax Act was $164 and was based on total post-1986 earnings and profits (E&P) that had previously been deferred from U.S. income taxes. We utilized our existing foreign tax credit carryforwards to settle this deemed repatriation tax. Our net charge for the Tax Act also included a charge of $99 for other tax liabilities and adjustments resulting from our actual and anticipated distributions of our net accumulated foreign E&P. As a consequence of the Tax Act, we now no longer consider our post 1986 E&P indefinitely reinvested. Deferred tax assets and liabilities: Our net charge includes a $191 charge for the remeasurement of certain deferred tax assets and liabilities based on the new statutory income tax rate of 25% , inclusive of estimated state taxes. Deferred Income Taxes At December 31, 2019 we have not provided deferred taxes on our undistributed pre-1987 E&P of approximately $350 , as such undistributed earnings have been determined to be indefinitely reinvested and we currently do not plan to initiate any action that would precipitate a deferred tax impact. The decrease from the amount at December 31, 2018 of $1.5 billion is due to our sale of Fuji Xerox in November 2019 – refer to Note 7 – Divestitures for additional information regarding this sale. Additionally, we have also not provided deferred taxes on the outside basis differences in our investments in foreign subsidiaries that are unrelated to undistributed earnings. These basis differences are also indefinitely reinvested. A determination of the unrecognized deferred taxes related to these components is not practicable. The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows: December 31, 2019 2018 Deferred Tax Assets Research and development $ 143 $ 252 Post-retirement medical benefits 98 99 Net operating losses 389 389 Operating reserves, accruals and deferrals 95 138 Tax credit carryforwards 239 254 Deferred and share-based compensation 26 32 Pension 298 266 Depreciation 9 90 Operating lease liabilities 347 — Other 62 46 Subtotal 1,706 1,566 Valuation allowance (399 ) (397 ) Total $ 1,307 $ 1,169 Deferred Tax Liabilities Finance lease and installment sales $ 243 $ 291 Intangibles and goodwill 128 129 Unremitted earnings of foreign subsidiaries 39 59 Operating lease ROU assets 319 — Other 17 1 Total $ 746 $ 480 Total Deferred Taxes, Net $ 561 $ 689 Reconciliation to the Consolidated Balance Sheets Deferred tax assets $ 598 $ 740 Deferred tax liabilities (1) (37 ) (51 ) Total Deferred Taxes, Net $ 561 $ 689 _____________ (1) Represents the deferred tax liabilities recorded in Other long-term liabilities - refer to Note 15 - Supplementary Financial Information. We record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and the amounts reported, as well as net operating loss and tax credit carryforwards. Deferred tax assets are assessed for realizability and, where applicable, a valuation allowance is recorded to reduce the total deferred tax asset to an amount that will, more-likely-than-not, be realized in the future. We apply judgment in assessing the realizability of these deferred tax assets and the need for any valuation allowances. In determining the amount of deferred tax assets that are more-likely-than-not to be realized, we considered historical profitability, projected future taxable income, the expected timing of the reversals of existing temporary difference and tax planning strategies. The deferred tax assets requiring significant judgment are US tax credit carryforwards with a limited life and a foreign net operating loss with an indefinite carryforward period. The net change in the total valuation allowance for the years ended December 31, 2019 , 2018 and 2017 was an increase of $2 , a decrease of $38 and an increase of $19 , respectively. The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which we have concluded it is more-likely-than-not that these items will not be realized in the ordinary course of operations. Although realization is not assured, we have concluded that it is more-likely-than-not that the deferred tax assets, for which a valuation allowance was determined to be unnecessary, will be realized in the ordinary course of operations based on the available positive and negative evidence, including scheduling of deferred tax liabilities and projected income from operating activities. The amount of the net deferred tax assets considered realizable, however, could change in the near term if future income or income tax rates are higher or lower than currently estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences. At December 31, 2019 , we had tax credit carryforwards of $239 available to offset future income taxes, of which $1 are available to carryforward indefinitely while the remaining $238 will expire 2020 through 2040 if not utilized. We also had net operating loss carryforwards for income tax purposes of $522 that will expire 2020 through 2040, if not utilized, and $1.7 billion available to offset future taxable income indefinitely. |
Contingencies and Litigation
Contingencies and Litigation | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Litigation | Contingencies and Litigation As more fully discussed below, we are involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities law; governmental entity contracting, servicing and procurement law; intellectual property law; environmental law; employment law; the Employee Retirement Income Security Act (ERISA); and other laws and regulations. We determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. We assess our potential liability by analyzing our litigation and regulatory matters using available information. We develop our views on estimated losses in consultation with outside counsel handling our defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. Additionally, guarantees, indemnifications and claims arise during the ordinary course of business from relationships with suppliers, customers and nonconsolidated affiliates, as well as through divestitures and sales of businesses, when the Company undertakes an obligation to guarantee the performance of others if specified triggering events occur. Nonperformance under a contract could trigger an obligation of the Company. These potential claims include actions based upon alleged exposures to products, real estate, intellectual property such as patents, environmental matters, and other indemnifications. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims. However, while the ultimate liabilities resulting from such claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the Company's consolidated financial position or liquidity. As of December 31, 2019 , we have accrued our estimate of liability incurred under our indemnification arrangements and guarantees. Brazil Contingencies Our Brazilian operations have received or been the subject of numerous governmental assessments related to indirect and other taxes. These tax matters principally relate to claims for taxes on the internal transfer of inventory, municipal service taxes on rentals and gross revenue taxes. We are disputing these tax matters and intend to vigorously defend our positions. Based on the opinion of legal counsel and current reserves for those matters deemed probable of loss, we do not believe that the ultimate resolution of these matters will materially impact our results of operations, financial position or cash flows. Below is a summary of our Brazilian tax contingencies: December 31, December 31, Tax contingency - unreserved $ 442 $ 500 Escrow cash deposits 51 58 Surety bonds 135 106 Letters of credit 91 104 Liens on Brazilian assets — — The decrease in the unreserved portion of the tax contingency, inclusive of any related interest, was primarily related to closed cases. With respect to the unreserved tax contingency, the majority has been assessed by management as being remote as to the likelihood of ultimately resulting in a loss to the Company. In connection with the above proceedings, customary local regulations may require us to make escrow cash deposits or post other security of up to half of the total amount in dispute, as well as additional surety bonds and letters of credit, which include associated indexation. Generally, any escrowed amounts would be refundable and any liens on assets would be removed to the extent the matters are resolved in our favor. We are also involved in certain disputes with contract and former employees. Exposures related to labor matters are not material to the financial statements as of December 31, 2019 . We routinely assess all these matters as to probability of ultimately incurring a liability against our Brazilian operations and record our best estimate of the ultimate loss in situations where we assess the likelihood of an ultimate loss as probable. Litigation Against the Company Pending Litigation Relating to the Fuji Transaction: 1. Deason v. Fujifilm Holdings Corp., et al.; Deason v. Xerox Corp., et al.; In re Xerox Corporation Consolidated Shareholder Litigation: In February 2018, five complaints (the "Fuji Transaction Shareholder Lawsuits"), including four putative class actions (which have been consolidated), were filed by Xerox shareholders in the Supreme Court of the State of New York, County of New York (the "Court") in connection with the proposed transaction to combine Xerox and Fuji Xerox (the “Fuji Transaction”). All of the complaints named as defendants Xerox, its directors, and FUJIFILM Holdings Corporation (“Fujifilm”). The complaint in one of the actions also named as a defendant Ursula M. Burns, the former Chief Executive Officer of Xerox. The plaintiffs alleged, among other things, that Xerox's directors breached their fiduciary duties in negotiating, approving, and purportedly making false and misleading disclosures about the Fuji Transaction, and that Fujifilm aided and abetted those breaches. The complaint in one of the actions further alleged that Xerox and the director defendants engaged in common law fraud by purportedly failing to disclose information about the joint venture agreements between Xerox and Fujifilm. The Fuji Transaction Shareholder Lawsuits sought injunctive relief preventing the previously proposed transactions, and/or additional disclosures by Xerox’s directors, unspecified damages from Xerox’s directors, costs and attorneys’ fees, as well as other relief. One of the Fuji Transaction Shareholder Lawsuits was brought by Darwin Deason, a Xerox shareholder ("Deason I"). Another complaint was filed by Mr. Deason against Xerox and its directors in the same Court on March 2, 2018 ("Deason II") alleging that defendants breached their fiduciary duties by refusing Mr. Deason’s request for a waiver of the deadline for nomination of a new slate of Xerox directors. In Deason II, Mr. Deason sought to enjoin Xerox and its directors from enforcing Xerox’s advance notice by-laws, thereby allowing Mr. Deason to proceed with the nominations, as well as costs, fees, and other relief. On April 27, 2018, the Court issued decisions and orders granting plaintiffs’ preliminary injunction motions, which (i) enjoined Xerox from “taking any further action to consummate the change of control transaction between Xerox and Fuji that was announced on January 31, 2018 pending a final determination of the claims asserted in the underlying action;” (ii) enjoined Xerox from enforcing its advance notice bylaw provision requiring shareholders to nominate directors for election at the 2018 annual shareholder meeting by December 11, 2017; and (iii) required Xerox to waive such advance notice bylaw provision to permit the noticing of a slate of director nominees for election at the 2018 annual shareholder meeting, and denying defendants’ motions to dismiss. On May 1, 2018, Xerox entered into a Director Appointment, Nomination and Settlement Agreement (the “Initial Settlement Agreement”) with Mr. Deason and Carl C. Icahn and certain of his affiliates who were also Xerox shareholders (the "Icahn Group"), among others, that would have resolved Deason I, Deason II and the pending proxy contest in connection with Xerox’s 2018 Annual Meeting of Shareholders. The Initial Settlement Agreement expired by its terms on May 3, 2018 without becoming effective. On May 7, 2018, defendants filed with the Supreme Court of the State of New York, Appellate Division, First Judicial Department, notices of appeal of, and motions to stay pending appeal, the lower Court’s decision and order. Defendants also moved the appellate court for interim relief ordering that the appeal be heard on an expedited basis. At a hearing before the appellate court on May 7, 2018, the appellate court ruled that the appeals would be heard on an expedited basis and granted a partial interim stay allowing Xerox and Fujifilm to take steps to seek regulatory approvals related to the Fuji Transaction pending a ruling from the appellate court on defendants’ motions to stay pending appeal. On May 13, 2018, a second Director Appointment, Nomination and Settlement Agreement (the "Final Settlement Agreement") with respect to Deason I, Deason II and the pending proxy contest in connection with Xerox's 2018 Annual Meeting of Shareholders that was initiated by the Icahn Group was signed on behalf of Mr. Deason, the Icahn Group and all defendants except Fujifilm, and a memorandum of understanding regarding settlement of the putative class case was signed by all defendants except Fujifilm. Pursuant to the settlements, the settling defendants withdrew their appeal and motion to stay in Deason I and Deason II. The settling defendants also withdrew their motion to stay in the putative class case. The Court entered a stipulation of discontinuance as to the settling parties in Deason II on May 14, 2018, and agreed on June 22, 2018 to do the same in Deason I. On June 14, 2018, Fujifilm filed answers in Deason I and the putative class case, along with cross-claims against the members of the Xerox Board (as constituted before May 13, 2018) and a third-party complaint against Xerox director Jonathan Christodoro, seeking contribution for any potential award against Fujifilm for aiding and abetting purported breaches of fiduciary duties. On June 19, 2018, the putative class plaintiffs filed a motion for preliminary approval of a stipulation of settlement that would resolve the claims asserted by the plaintiffs in the putative class case against all defendants, other than Fujifilm. Carmen Ribbe, the plaintiff in the below derivative action, and Fujifilm filed oppositions to the motion on July 10, 2018. On June 22, 2018, the Court entered an order denying a joint motion by the putative class plaintiffs and the settling defendants to dissolve the injunction in the putative class case as against the settling defendants, and entered an order denying Fujifilm’s motion to dissolve the injunctions in the putative class case and Deason I in their entirety. On July 16, 2018, the Court held a hearing concerning the putative class plaintiffs’ motion for preliminary approval of the settlement in the putative class case. The Court indicated that it was not inclined to consider motions for approval of the settlement prior to considering whether the putative class should be certified. On August 2, 2018, the Appellate Division entered orders recognizing the Xerox defendants’ withdrawal of their appeal in the Deason cases and denying all appellants’ motions to stay pending determination of appeals in the Deason and putative class cases. On August 2, 2018, the Appellate Division entered orders (i) at their request, deeming withdrawn the Xerox defendants’ appeal and motion to stay in the Deason cases; (ii) upon their request, deeming withdrawn the Xerox defendants’ motion to stay, pending determination of appeal, the putative class case; and (iii) denying Fujifilm’s motion to stay pending determination of its appeals in the Deason and putative case cases. On September 21, 2018, putative class plaintiffs filed a motion for certification of a settlement class and a motion to transmit notice of the proposed settlement to the proposed class. On October 17, 2018, derivative plaintiff Carmen Ribbe and Fujifilm filed oppositions to the putative class plaintiffs’ motion to transmit notice to the proposed class. The class has not yet been certified, and preliminary approval has not been granted. The Appellate Division heard oral argument on September 25, 2018 on Fujifilm’s appeal of the Court’s decision. On October 16, 2018, the Appellate Division entered a decision and order reversing the Court’s rulings, ordering that the claims brought against Fujifilm in the cases by Mr. Deason and the purported class be dismissed, and further ordering that the preliminary injunction of the proposed Fuji Transaction be dissolved (the “Appellate Decision and Order”). On November 15, 2018, the putative class plaintiffs filed with the Appellate Division a motion seeking the opportunity to reargue Fujifilm’s appeal or, in the alternative, for leave to appeal the Appellate Decision and Order to the New York State Court of Appeals. On December 6, 2018, pursuant to the Appellate Decision and Order, the Court entered a judgment dismissing the complaints against Fujifilm in Deason I and the putative class case. The Court further issued orders denying the putative class plaintiffs’ motion for class certification, without prejudice to renewing the motion after the outcome of any appeals of the Appellate Decision and Order. On January 8, 2019, the Court entered an order staying all further proceedings in Deason I and the putative class case until thirty days after exhaustion of appeals, including any appeals to the New York State Court of Appeals, of the Appellate Decision and Order. On January 9, 2019, the Court entered an order denying the putative class plaintiffs’ motion to transmit notice to the proposed class, without prejudice to renewal of their motion at a later time. On October 31, 2018 and January 3, 2019, respectively, Xerox and the Xerox director defendants in the putative class case filed with the Appellate Division a request and motion seeking an extension, until after any decision regarding approval of settlement of the putative class action, of the deadline by which to perfect their appeal of the Court’s April 27, 2018 decision and order. On May 16, 2019, the Appellate Division entered an order granting the motion and extended the deadline until the October 2019 Term. On February 21, 2019, the Appellate Division issued an order denying the putative class plaintiffs’ motion seeking to reargue Fujifilm’s appeal or, in the alternative, for leave to appeal the Appellate Decision and Order to the New York State Court of Appeals. No further notice of appeal was filed, and the Appellate Decision and Order became final and unappealable on March 26, 2019. On May 3, 2019, putative class plaintiffs filed a renewed motion for approval of the form of a notice to putative class members. On May 6, 2019, putative class plaintiffs filed a renewed motion for class certification and notice of motion to approve class settlement and proposed final approval order. On May 24, 2019, the Court entered an order approving the form notice and proposed manner of its dissemination. On June 6, 2019, the Court entered an order pursuant to which plaintiffs submitted their motion to approve attorneys’ fees and expenses on July 19, 2019; requiring filing of any objections to or opt-outs from the proposed putative class settlement by August 9, 2019; and setting September 6, 2019 for its hearing on putative class plaintiffs’ motion for class certification and settlement approval. The hearing took place, and on September 12, 2019, the Court entered a decision and order denying both motions. At a conference held on November 19, 2019, the Court so-ordered the parties' joint stipulation and proposed order of discontinuance without prejudice, without payment by any party. 2. Ribbe v. Jacobson, et al.: On April 11, 2019, Carmen Ribbe filed a putative derivative and class action stockholder complaint in the Supreme Court of the State of New York for New York County, naming as defendants Xerox, current Board members Gregory Q. Brown, Joseph J. Echevarria, Cheryl Gordon Krongard, Sara Martinez Tucker, Keith Cozza, Giovanni G. Visentin, Jonathan Christodoro, Nicholas Graziano, and A. Scott Letier, and former Board members Jeffrey Jacobson, William Curt Hunter, Robert J. Keegan, Charles Prince, Ann N. Reese, and Stephen H. Rusckowski. Plaintiff previously filed a putative shareholder derivative lawsuit on May 24, 2018 against certain of these defendants, as well as others, in the same court; that lawsuit was dismissed without prejudice on December 6, 2018. The new complaint included putative derivative claims on behalf of Xerox for breach of fiduciary duty against the members of the Xerox Board who approved Xerox’s entry into agreements to settle the Deason and In re Xerox Corporation Consolidated Shareholder Litigation (“XCCSL”) actions (described above). Plaintiff alleges that the settlements ceded control of the Board and the Company to Darwin Deason and Carl C. Icahn without a vote by, or compensation to, other Xerox stockholders; improperly provided certain benefits and releases to the resigning and continuing directors; and subjected Xerox to potential breach of contract damages in an action by Fuji relating to Xerox’s termination of the proposed Fuji Transaction. Plaintiff also alleges that the current Board members breached their fiduciary duties by allegedly rejecting plaintiff’s January 14, 2019 shareholder demand on the Board to remedy harms arising from entry into the Deason and XCCSL settlements. The new complaint further included direct claims for breach of fiduciary duty on behalf of a putative class of current Xerox stockholders other than Mr. Deason, Mr. Icahn, and their affiliated entities (the “Ribbe Class”) against the defendants for causing Xerox to enter into the Deason and XCCSL settlements, which plaintiff alleges perpetuated control of Xerox by Mr. Icahn and Mr. Deason and denied the voting franchise of Xerox shareholders. Among other things, plaintiff seeks damages in an unspecified amount for the alleged fiduciary breaches in favor of Xerox against defendants jointly and severally; rescission or reformation of the Deason and XCCSL settlements; restitution of funds paid to the resigning directors under the Deason settlement; an injunction against defendants’ engaging in the alleged wrongful practices and equitable relief affording the putative Ribbe Class the ability to determine the composition of the Board; costs and attorneys’ fees; and other further relief as the Court may deem proper. Defendants accepted service of the complaint as of May 16, 2019. On June 4, 2019, the Court entered an order setting a briefing schedule for defendants’ motions to dismiss the complaint. On July 12, 2019, plaintiff filed a motion to preclude defendants from referencing in their motions to dismiss the formation of, or work by, the committee of the Board established to investigate plaintiff’s shareholder demand. On July 18, 2019, the Court denied plaintiff’s motion and adjourned sine die the deadline by which defendants must file any motions to dismiss the complaint. On January 6, 2020, plaintiff filed his first amended complaint (“FAC”). The FAC includes many of plaintiff’s original allegations regarding the 2018 shareholder litigation and settlements, as well as additional allegations, including, among others, that the members of the Special Committee of the Board that investigated plaintiff’s demand lacked independence and wrongfully refused to pursue the claims in the demand; allegations that an agreement announced in November 2019 for, among other things, the sale by Xerox of its interest in Fuji Xerox to Fujifilm and dismissal of Fujifilm’s breach of contract lawsuit against Xerox (the “FX Sale Transaction”), was unfavorable to Xerox; and allegations about a potential acquisition by Xerox of HP similar to those in the Miami Firefighters derivative action described below. In addition to the claims in the April 11, 2019 complaint, the FAC adds as defendants Carl C. Icahn, Icahn Capital LP, and High River Limited Partnership (the “Icahn defendants”) and asserts claims against those defendants and the Board similar to those in Miami Firefighters relating to the Icahn defendants’ purchases of HP stock allegedly with knowledge of material nonpublic information concerning Xerox’s potential acquisition of HP. In addition to the relief sought in Ribbe’s prior complaint, the FAC seeks relief similar to that sought in Miami Firefighters relating to the Icahn defendants’ alleged purchases of HP stock. On January 21, 2020, plaintiff in the Miami Firefighters action filed a motion seeking to intervene in Ribbe and to have stayed, or alternatively, severed and consolidated with the Miami Firefighters action, any claims first filed in Miami Firefighters and later asserted by Ribbe. At a conference held on February 25, 2020, the Court denied the motion to intervene without prejudice. Xerox will vigorously defend against this matter. At this time, it is premature to make any conclusion regarding the probability of incurring material losses in this litigation. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement, there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in determination, judgment, or settlement occurs. 3. Fujifilm Holdings Corp. v. Xerox Corporation: On June 18, 2018, Fujifilm filed a complaint against Xerox in the U.S. District Court for the Southern District of New York, relating to the Fuji Transaction agreements. The complaint alleges that Xerox: (1) willfully breached the Fuji Transaction agreements by purporting to terminate them to appease Messrs. Icahn and Deason and using as a pretext issues with Fujifilm’s untimely submitted financials, and by settling Deason I and Deason II without notice to or consent by Fujifilm; (2) willfully breached the implied covenant of good faith and fair dealing by failing to support and use best efforts to conclude the Fuji Transaction, thus depriving Fujifilm of the benefit of its bargain; and (3) effected a change in Xerox’s recommendation regarding the Fuji Transaction, entitling Fujifilm to terminate the Fuji Transaction agreements and to receive from Xerox a $183 termination fee. Fujifilm seeks a judgment for damages to be determined at trial in an amount in excess of $1.0 billion plus punitive damages; a declaration regarding the alleged change in recommendation such that Fujifilm may terminate the transaction and Xerox must pay the $183 termination fee and other remedies; costs and attorneys’ fees; and other relief the court may deem appropriate. At a conference on September 24, 2018, the Court stayed all discovery pending resolution of Xerox’s motion to dismiss. Xerox filed its motion to dismiss on October 1, 2018. On February 22, 2019, following oral argument, the Court denied the motion to dismiss. On March 12, 2019, the Court entered a scheduling order setting various case deadlines. Xerox filed its answer denying the claims on March 15, 2019. Discovery has commenced and is ongoing. On June 24, 2019 and August 12, 2019, the Court entered stipulated revised scheduling orders extending certain case deadlines. In November 2019, the parties entered into a Dismissal and Release Agreement pursuant to which, on November 12, 2019, they filed a joint stipulation of dismissal with prejudice. No payment by Xerox was required. 4. Miami Firefighters’ Relief & Pension Fund v. Icahn, et al.: On December 13, 2019, alleged shareholder Miami Firefighters’ Relief & Pension Fund (“Miami Firefighters”) filed a purported derivative complaint in New York State Supreme Court, New York County on behalf of Xerox Holdings Corporation ("Xerox Holdings") (as nominal defendant) against Carl Icahn and his affiliated entities High River Limited Partnership and Icahn Capital LP (the "Icahn defendants"), Xerox Holdings, and all current Xerox Holdings directors (the "Directors"). Plaintiff made no demand on the Board before bringing the action, but instead alleges that doing so would be futile because the Directors lack independence due to alleged direct or indirect relationships with Icahn. Among other things, the complaint alleges that Icahn controls and dominates Xerox Holdings and therefore owes a fiduciary duty of loyalty to Xerox Holdings, which he breached by acquiring HP stock at a time when he knew that Xerox Holdings was considering an offer to acquire HP or had knowledge of the "obvious merits" of such potential acquisition, and that the Icahn defendants’ holdings of HP common stock have risen in market value by approximately $128 since disclosure of the offer. The complaint includes four causes of action: breach of fiduciary duty of loyalty against the Icahn defendants; breach of contract against the Icahn defendants (for purchasing HP stock in violation of Icahn’s confidentiality agreement with Xerox Holdings); unjust enrichment against the Icahn defendants; and breach of fiduciary duty of loyalty against the Directors (for any consent to the Icahn defendants’ purchases of HP common stock while Xerox Holdings was considering acquiring HP). The complaint seeks a judgment of breach of fiduciary duties against the Icahn defendants and the Directors; a declaration that Icahn breached his confidentiality agreement with Xerox Holdings; a constructive trust on Icahn Capital and High River's investments in HP securities; disgorgement to Xerox Holdings of profits Icahn Capital and High River earned from trading in HP stock; payment of unspecified damages by the Directors for breaching fiduciary duties; and attorneys' fees, costs, and other relief the Court deems just and proper. On January 15, 2020, the Court entered an order granting plaintiff’s unopposed motion to consolidate with Miami Firefighters a similar action filed on December 26, 2019 by alleged shareholder Steven J. Reynolds against the same parties in the same court, and designating Miami Firefighters’ counsel as lead counsel in the consolidated action. On January 21, 2020, plaintiff filed a motion seeking to intervene in Ribbe v. Jacobson, et al. , described above, and to have stayed, or alternatively, severed and consolidated with this action, any claims first filed in this action and later asserted by Ribbe. At a conference held on February 25, 2020, the Court denied the motion to intervene without prejudice. Xerox Holdings will vigorously defend against this matter. At this time, it is premature to make any conclusion regarding the probability of incurring material losses in this litigation. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement, there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in determination, judgment, or settlement occurs. Guarantees, Indemnifications and Warranty Liabilities Indemnifications Provided as Part of Contracts and Agreements Acquisitions/Divestitures: We have indemnified, subject to certain deductibles and limits, the purchasers of businesses or divested assets for the occurrence of specified events under certain of our divestiture agreements. In addition, we customarily agree to hold the other party harmless against losses arising from a breach of representations and covenants, including such matters as adequate title to assets sold, intellectual property rights, specified environmental matters and certain income taxes arising prior to the date of acquisition. Where appropriate, an obligation for such indemnifications is recorded as a liability at the time of the acquisition or divestiture. Since the obligated amounts of these types of indemnifications are often not explicitly stated and/or are contingent on the occurrence of future events, the overall maximum amount of the obligation under such indemnifications cannot be reasonably estimated. Other than obligations recorded as liabilities at the time of divestiture, we have not historically made significant payments for these indemnifications. Additionally, under certain of our acquisition agreements, we have provided for additional consideration to be paid to the sellers if established financial targets are achieved post-closing. We have recognized liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of acquisition. Contingent obligations related to indemnifications arising from our divestitures and contingent consideration provided for by our acquisitions are not expected to be material to our financial position, results of operations or cash flows. Other Agreements: We are also party to the following types of agreements pursuant to which we may be obligated to indemnify the other party with respect to certain matters: • Guarantees on behalf of our subsidiaries with respect to real estate leases. These lease guarantees may remain in effect subsequent to the sale of the subsidiary. • Agreements to indemnify various service providers, trustees and bank agents from any third-party claims related to their performance on our behalf, with the exception of claims that result from a third-party's own willful misconduct or gross negligence. • Guarantees of our performance in certain sales and services contracts to our customers and indirectly the performance of third parties with whom we have subcontracted for their services. This includes indemnifications to customers for losses that may be sustained as a result of the use of our equipment at a customer's location. In each of these circumstances, our payment is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract and such procedures also typically allow us to challenge the other party's claims. In the case of lease guarantees, we may contest the liabilities asserted under the lease. Further, our obligations under these agreements and guarantees may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments we made. Patent Indemnifications In most sales transactions to resellers of our products, we indemnify against possible claims of patent infringement caused by our products or solutions. In addition, we indemnify certain software providers against claims that may arise as a result of our use or our subsidiaries', customers' or resellers' use of their software in our products and solutions. These indemnities usually do not include limits on the claims, provided the claim is made pursuant to the procedures required in the sales contract. Indemnification of Officers and Directors Xerox Holdings' and our corporate by-laws require that, except to the extent expressly prohibited by law, we must indemnify Xerox Holdings' and Xerox's officers and directors, respectively, against judgments, fines, penalties and amounts paid in settlement, including legal fees and all appeals, incurred in connection with civil or criminal action or proceedings, as it relates to their services to Xerox Holdings and/or Xerox Corporation and their subsidiaries. Although the by-laws provide no limit on the amount of indemnification, Xerox Holdings or we may have recourse against our insurance carriers for certain payments made by Xerox Holdings or us. However, certain indemnification payments (such as those related to "clawback" provisions in certain compensation arrangements) may not be covered under Xerox Holdings' and our directors' and officers' insurance coverage. Xerox Holdings and we also indemnify certain fiduciaries of our employee benefit plans for liabilities incurred in their service as fiduciary whether or not they are officers of Xerox Holdings or the Company. Finally, in connection with Xerox Holdings and/or our acquisition of businesses, we may become contractually obligated to indemnify certain former and current directors, officers and employees of those businesses in accordance with pre-acquisition by-laws and/or indemnification agreements and/or applicable state law. Product Warranty Liabilities In connection with our normal sales of equipment, including those under sales-type leases, we generally do not issue product warranties. Our arrangements typically involve a separate full service maintenance agreement with the customer. The agreements generally extend over a period equivalent to the lease term or the expected useful life of the equipment under a cash sale. The service agreements involv |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Preferred Stock | Preferred Stock Corporate Reorganization As disclosed in Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, on July 31, 2019, Xerox completed the Reorganization, pursuant to which Xerox became a direct, wholly-owned subsidiary of Xerox Holdings. In conjunction with the reorganization, the individual holder of the shares of Xerox’s Series B Convertible Perpetual Preferred Stock (Series B Preferred Stock) exchanged those shares for the same number of shares of Xerox Holdings Series A Convertible Perpetual Preferred Voting Stock (Series A Preferred Stock). Each share of Xerox Holdings Series A Preferred Stock has the same designations, rights, powers and preferences, and the same qualifications, limitations and restrictions as the shares of Xerox Series B Preferred Stock, with the addition of certain voting rights. Subsequent to the Reorganization, Xerox Holdings contributed the Xerox Series B Preferred Stock it held to Xerox in exchange for additional capital and Xerox subsequently extinguished the Series B Preferred Stock. The contribution and extinguishment were recorded at carrying value and as a result of this subsequent exchange, Xerox has no Preferred Stock outstanding at December 31, 2019. Series A Convertible Perpetual Voting Preferred Stock As of December 31, 2019 , Xerox Holdings had one class of preferred stock outstanding. Xerox Holdings has issued 180,000 shares of Series A Preferred Stock that have an aggregate liquidation value of $180 and a carrying value of $214 . The Series A Preferred Stock pays quarterly cash dividends at a rate of 8% per year ( $14 per year), on a cumulative basis. Each share of Series A Preferred Stock is convertible at any time, at the option of the holder, into 37.4532 shares of common stock for a total of 6,742 thousand shares (reflecting an initial conversion price of approximately $26.70 per share of common stock), subject to customary anti-dilution adjustments. If the closing price of Xerox Holdings common stock exceeds $39.00 or 146.1% of the initial conversion price of $26.70 per share of common stock for 20 out of 30 consecutive trading days, Xerox Holdings will have the right to cause any or all of the Series A Preferred Stock to be converted into shares of common stock at the then applicable conversion rate. The Series A Preferred Stock is also convertible, at the option of the holder, upon a change in control, at the applicable conversion rate plus an additional number of shares determined by reference to the price paid for our common stock upon such change in control. In addition, upon the occurrence of certain fundamental change events, including a change in control or the delisting of Xerox Holdings's common stock, the holder of the Series A Preferred Stock has the right to require us to redeem any or all of the preferred stock in cash at a redemption price per share equal to the liquidation preference and any accrued and unpaid dividends up to, but not including, the redemption date. The Series A Preferred Stock is classified as temporary equity (i.e., apart from permanent equity) as a result of the contingent redemption feature. Series A Preferred Stock Voting Rights - The Xerox Holdings Series A Preferred Stock will vote together with the Xerox Holdings common stock, as a single class, on all matters submitted to the shareholders of Xerox Holdings, but the Xerox Holdings Series A Voting Preferred Stock will only be entitled to one vote for every ten shares of Xerox Holdings common stock into which the Holdings Series A Preferred Stock is convertible ( 674,157 at December 31, 2019). |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity As disclosed in Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, as part of the reorganization of Xerox Holdings and Xerox into a holding company structure effective July 31, 2019, shareholders of Xerox became shareholders of Xerox Holdings on a one-for-one basis; maintaining the same number of shares and ownership percentage as held in Xerox immediately prior to the Reorganization. Xerox Holdings Preferred Stock Xerox Holdings is authorized to issue approximately 22 million shares of cumulative preferred stock, $1.00 par value per share. Refer to Note 22 - Preferred Stock for additional information. Common Stock Xerox Holdings is authorized to issue 437.5 million shares of common stock, $1.00 par value per share. At December 31, 2019 , 15 million shares were reserved for issuance under our incentive compensation plans and 7 million shares were reserved for conversion of the Series A Convertible Perpetual Preferred Voting Stock. Treasury Stock Xerox Holdings accounts for the repurchased common stock under the cost method and includes such treasury stock as a component of our common shareholders' equity. Retirement of treasury stock is recorded as a reduction of Common stock and Additional paid-in capital at the time such retirement is approved by our Board of Directors. In July 2019, as part of the reorganization of Xerox Holdings and Xerox into a holding company structure, Xerox Holdings' Board of Directors authorized a $1.0 billion share repurchase program (exclusive of any commissions and other transaction fees and costs related thereto.) This program replaced the $1.0 billion of authority remaining under Xerox's previously authorized share repurchase program. The following provides cumulative information relating to Xerox's previously authorized share repurchase program from its inception through July 31, 2019, the effective date of the Reorganization (shares in thousands): Authorized share repurchase program $ 2,000 Share repurchase cost $ 1,000 Share repurchase fees $ 1 Number of shares repurchased 35,339 The following provides cumulative information relating to Xerox Holdings' share repurchase program from its inception on July 31, 2019 through December 31, 2019 (shares in thousands): Authorized share repurchase program $ 1,000 Share repurchase cost $ 300 Share repurchase fees $ — Number of shares repurchased 9,097 Of the $1.0 billion of share repurchase granted in 2019 by Xerox Holdings' Board of Directors, approximately $700 of that authority remained available as of December 31, 2019 . The following table reflects the changes in Common and Treasury stock shares (shares in thousands). The Treasury stock repurchases in the table below include the repurchases under both the prior Xerox authorized share repurchase program and the current Xerox Holdings authorized share repurchase program. Common Stock Shares Treasury Stock Shares Balance at December 31, 2016 253,594 — Stock based compensation plans, net 1,019 — Balance at December 31, 2017 254,613 — Stock based compensation plans, net 1,103 — Acquisition of Treasury stock — 26,093 Cancellation of Treasury stock (24,026 ) (24,026 ) Balance at December 31, 2018 231,690 2,067 Stock based compensation plans, net 1,310 — Acquisition of Treasury stock — 18,343 Cancellation of Treasury stock (18,379 ) (18,379 ) Balance at December 31, 2019 214,621 2,031 Xerox In connection with the Reorganization, the capital structure of Xerox was modified such that its issued and outstanding common shares are now entirely held by Xerox Holdings. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information regarding the Reorganization. At December 31, 2019, Xerox has 1,000 authorized shares of common stock, $1.00 par value per share, of which 100 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation (shares in thousands) We have a long-term incentive plan whereby eligible employees may be granted restricted stock units (RSUs), performance share units (PSUs) and stock options (SOs). We grant stock-based compensation awards in order to continue to attract and retain qualified employees and to better align employees' interests with those of our shareholders. Each of these awards is subject to settlement with newly issued shares of Xerox Holding's common stock. At December 31, 2019 and 2018 , 13 million and 14 million shares, respectively, were available for grant of awards. Stock-based compensation expense was as follows: Year Ended December 31, 2019 2018 2017 Stock-based compensation expense, pre-tax $ 50 $ 57 $ 52 Income tax benefit recognized in earnings 13 14 20 In 2019, the timing of our annual grant of awards was changed from April to January to more closely align the grant date with the underlying performance period related to PSUs. Stock options were not awarded under the 2019 grant. Restricted Stock Units Compensation expense for RSUs is based upon the grant-date market price and is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of shares expected to vest. Beginning with the 2018 grant, RSU's vest on a graded schedule as follows: 25% after one year of service, 25% after two years of service and 50% after three years of service from the date of grant. Prior to the 2018 grant, RSUs vested on a three -year cliff basis from the date of grant. Performance Share Units In connection with the January 2019 PSU grant, the Board approved a change to the market-based component of the PSUs, replacing the Total Shareholder Return (TSR) metric with an Absolute Share Price (ASP) metric which focuses on stock price appreciation. The Board retained a Revenue and Free Cash Flow metric as performance-based measures as well as the three-year measurement period for all components. The components are weighted as follows: 25% Revenue, 25% Free Cash Flow and 50% Absolute Share Price. Accordingly, each PSU grant is one-half performance based (Revenue and Free Cash Flow) and one-half market-based (ASP). The measures are independent of each other and depending on the achievement of these metrics, a recipient of a PSU award is entitled to receive a number of shares equal to a percentage, ranging from 0% to 200% of the PSU award granted. The 2019 PSUs retained the three -year cliff vesting from the date of grant. PSU awards granted in 2018 were comprised of a performance-based component that included Revenue Growth and Free Cash Flow metrics and a market-based component that included a TSR metric. The metrics were equally weighted; accordingly, each PSU grant was two-thirds performance-based (Revenue Growth and Free Cash Flow) and one-third market-based (TSR). The measures are independent of each other and depending on the achievement of these metrics, a recipient of a PSU award is entitled to receive a number of shares equal to a percentage, ranging from 0% to 200% of the PSU award granted. The 2018 PSUs have a three -year cliff vesting from the date of grant. In December 2018, the Board approved and modified the performance-based metrics and the market-based metric of the 2018 PSU grant to a one -year performance period (2018), and a two -year time-based requirement (2019 and 2020). PSU awards granted in 2017 were exclusively performance based and included metrics for Revenue Growth, Earnings per Share and Cash Flow from Operations that were measured over a three -year performance period. The 2017 PSUs have a three -year cliff vesting from the date of grant. Performance-Based Component: PSUs vest contingent upon meeting pre-determined cumulative performance metrics. The fair value of our PSUs is based upon the grant-date market price. Compensation expense is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of shares expected to vest and based on meeting the performance metrics. If the cumulative three -year actual results exceed the stated targets, all plan participants have the potential to earn additional shares of common stock up to a maximum over-achievement of 100% of the original grant. If the stated targets are not met, any recognized compensation cost would be reversed. Market-Based Component: The ASP metric included as the market-based component of the 2019 PSU grant is based on Xerox Holding's average closing price for the last 20 trading days of the three-year performance period, inclusive of dividends during that period. Payout for this portion of the PSU will be determined based on total return targets. Since the ASP metric of the PSU award represents a market condition, a Monte Carlo simulation was used to determine the grant-date fair value. The TSR metric included as the market-based component of the 2018 PSU grant was based on the percentage change in Xerox Holdings stock price plus dividends paid over the three -year measurement period. Payout for this portion of the PSU was to be determined based on Xerox Holdings 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 metric of the PSU award represented a market condition, a Monte Carlo simulation was used to determine the grant-date fair value. A summary of Xerox Holdings key valuation input assumptions used in the Monte Carlo simulation relative to the 2019 and 2018 PSU awards granted were as follows: 2019 Award 2018 Award Term 3 years 3 years Risk-free interest rate (1) 2.51 % 2.39 % Dividend yield (2) 3.97 % 3.24 % Volatility (3) 32.95 % 29.12 % Weighted average fair value (4) $ 16.27 $ 32.01 ____________ (1) The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the performance period. (2) The dividend yield was calculated as the expected quarterly dividend divided by our three-month average stock price as of the valuation date, annualized and continuously compounded. (3) Volatility is derived from historical stock prices as well as implied volatility when appropriate and available. (4) The weighted-average of fair values used to record compensation expense as determined by the Monte Carlo simulation. Our 2019 Absolute Share Price metric is compared against total return targets to determine the payout as follows: Total Return Targets (1) Payout Percentage $40.00 and above 200 % $35.00 100 % $30.00 50 % Below $30.00 0 % Our 2018 TSR metric compared to the peer group TSR will determine the payout as follows: Percentile Payout as 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. Compensation expense for the market-based component of the PSU awards is recognized on a straight-line basis over the vesting period based on the fair value determined by the Monte Carlo simulation and, except in cases of employee forfeiture, cannot be reversed regardless of performance. There was no impact to compensation expense as a result of the Board’s approval to modify the 2018 TSR metric to a one-year performance period (2018) and a two-year time-based requirement (2019 and 2020). Stock Options The Board approved the granting of SOs as part of the 2018 plan design. Compensation expense associated with SOs is based upon the grant date fair value determined by utilizing the Black-Scholes (BS) option - pricing model and is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of SOs expected to vest. The 2018 SOs have a contractual term of 10 years from the date of grant and vest as follows: 25% after one year of service, 25% after two years of service, and 50% after three years of service from the date of grant. Xerox Holdings 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 were 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 term-matched historical volatility and implied volatility from traded options. (3) The dividend yield was calculated as the expected quarterly dividend divided by our 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. Note: Management’s estimate of the number of shares expected to vest at the time of grant reflects an estimate for forfeitures based on our historical forfeiture rate to date. Should actual forfeitures differ from management’s estimate, the activity will be reflected in a subsequent period. In addition, RSUs, PSUs and SOs awarded to employees who are retirement-eligible at the date of grant, become retirement-eligible during the vesting period, or are terminated not-for-cause (e.g. as part of a restructuring initiative), vest based on service provided from the date of grant to the date of separation. Summary of Stock-based Compensation Activity 2019 2018 2017 Shares Weighted Average Grant Date Fair Value (1) Shares Weighted Average Grant Date Fair Value (1) Shares Weighted Average Grant Date Fair Value Restricted Stock Units (2) Outstanding at January 1 3,559 $ 29.51 2,856 $ 30.65 1,807 $ 30.10 Granted 1,366 23.22 1,595 27.82 1,436 31.39 Vested (1,666 ) 29.28 (214 ) 30.39 (117 ) 36.99 Forfeited (414 ) 27.85 (678 ) 30.04 (270 ) 29.03 Outstanding at December 31 2,845 26.87 3,559 29.51 2,856 30.65 Performance Shares Outstanding at January 1 2,462 $ 29.83 3,117 $ 31.54 5,054 $ 33.98 Granted 1,433 19.46 1,060 27.36 1,349 32.80 Vested (633 ) 29.56 (853 ) 32.59 (1,413 ) 37.44 Forfeited/Expired (432 ) 27.50 (862 ) 30.26 (1,873 ) 34.59 Outstanding at December 31 2,830 24.99 2,462 29.83 3,117 31.54 Stock Options Outstanding at January 1 1,022 $ 27.84 — $ — — $ — Granted — — 1,414 27.88 — — Forfeited/Expired (92 ) 27.92 (392 ) 27.98 — — Exercised (69 ) 27.98 — — — — Outstanding at December 31 861 27.83 1,022 27.84 — — Exercisable at December 31 233 27.83 39 27.98 — — ____________ (1) Exercise price for stock options. (2) Includes a 2018 Restricted Stock Award (RSA) grant of 351 shares with a corresponding grant date fair value of $28.51 , which vested in 2019. Unrecognized compensation cost related to non-vested stock-based awards at December 31, 2019 was as follows: Awards Unrecognized Compensation Remaining Weighted-Average Vesting Period (Years) Restricted Stock Units $ 30 1.6 Performance Shares 28 1.7 Stock Options 2 1.3 Total $ 60 The aggregate intrinsic value of outstanding stock-based awards was as follows: Awards December 31, 2019 Restricted Stock Units $ 105 Performance Shares 104 Stock Options 8 The intrinsic value and actual tax benefit realized for all vested and exercised stock-based awards was as follows: December 31, 2019 December 31, 2018 December 31, 2017 Awards Total Intrinsic Value (1) Cash Received Tax Benefit Total Intrinsic Value Cash Received Tax Benefit Total Intrinsic Value Cash Received Tax Benefit Restricted Stock Units $ 55 $ — $ 11 $ 6 $ — $ 2 $ 3 $ — $ 1 Performance Share Units 23 — 6 21 — 4 40 — 12 Stock Options 1 2 — — — — — — — ____________ (1) RSUs include a RSA grant of 351 |
Other Comprehensive (Loss) Inco
Other Comprehensive (Loss) Income | 12 Months Ended |
Dec. 31, 2019 | |
Other Comprehensive Income [Abstract] | |
Other Comprehensive (Loss) Income | Other Comprehensive (Loss) Income As previously disclosed in Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, the historical statement of Comprehensive Income has not been revised to reflect the discontinued operations reporting for the Sales of our investments in Fuji Xerox and Xerox International Partners. However, in 2019, as a result of the sale of our investment in Fuji Xerox, we reclassified out of Accumulated other comprehensive loss and into earnings $165 of accumulated translation adjustments and defined benefit plan losses related to Fuji Xerox. The reclassified amounts are included in the gain recognized on the Sales. Refer to Note 7 - Divestitures for additional information regarding these Sales and the associated gain recognized. Other Comprehensive (Loss) Income is comprised of the following: Year Ended December 31, 2019 2018 2017 Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax Translation Adjustments Gains (Losses) Aggregate adjustment in period $ 53 $ 45 $ (251 ) $ (242 ) $ 484 $ 483 Divestiture - reclassification 17 17 — — — — Net Translation Adjustments Gains (Losses) 70 62 (251 ) (242 ) 484 483 Unrealized Gains (Losses) Changes in fair value of cash flow hedges gains (losses) 2 1 9 8 (28 ) (23 ) Changes in cash flow hedges reclassed to earnings (1) (9 ) (7 ) 14 10 35 25 Other losses — — (2 ) (2 ) (1 ) (1 ) Net Unrealized (Losses) Gains (7 ) (6 ) 21 16 6 1 Defined Benefit Plans (Losses) Gains Net actuarial/prior service (losses) gains (275 ) (202 ) 273 198 52 64 Prior service amortization/curtailment (2) (81 ) (61 ) (26 ) (20 ) (10 ) (7 ) Actuarial loss amortization/settlement (2) 156 118 252 190 236 158 Fuji Xerox changes in defined benefit plans, net (3) 8 8 (25 ) (25 ) 29 29 Other (losses) gains (4) (21 ) (21 ) 66 66 (138 ) (138 ) Divestiture - reclassification 148 148 — — — — Changes in Defined Benefit Plans (Losses) Gains (65 ) (10 ) 540 409 169 106 Other Comprehensive (Loss) Income (2 ) 46 310 183 659 590 Less: Other comprehensive income attributable to noncontrolling interests — — — — 1 1 Other Comprehensive (Loss) Income Attributable to Xerox Holdings $ (2 ) $ 46 $ 310 $ 183 $ 658 $ 589 _____________ (1) Reclassified to Cost of sales - refer to Note 17 - Financial Instruments for additional information regarding our cash flow hedges. (2) Reclassified to Total Net Periodic Benefit Cost - refer to Note 19 - Employee Benefit Plans for additional information. (3) Represents our share of Fuji Xerox's benefit plan changes. (4) Primarily represents currency impact on cumulative amount of benefit plan net actuarial losses and prior service credits in AOCL. Accumulated Other Comprehensive Loss (AOCL) AOCL is comprised of the following: December 31, 2019 2018 2017 Cumulative translation adjustments $ (1,961 ) $ (2,023 ) $ (1,781 ) Other unrealized (losses) gains, net (2 ) 4 (12 ) Benefit plans net actuarial losses and prior service credits (1)(2) (1,683 ) (1,546 ) (1,955 ) Total Accumulated Other Comprehensive Loss Attributable to Xerox Holdings $ (3,646 ) $ (3,565 ) $ (3,748 ) _____________ (1) Amounts prior to 2019 include our share of Fuji Xerox balances. (2) The change from December 31, 2018 includes $(127) related to the adoption of ASU 2018-02 and the reclassification of stranded tax effects resulting from the Tax Act - Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information. We utilize the aggregate portfolio approach for releasing disproportionate income tax effects from AOCL. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table sets forth the computation of basic and diluted earnings per share of Xerox Holdings' common stock (shares in thousands): Year Ended December 31, 2019 2018 2017 Basic Earnings per Share: Net Income from continuing operations attributable to Xerox Holdings $ 648 $ 306 $ 66 Accrued dividends on preferred stock (14 ) (14 ) (14 ) Adjusted Net income from continuing operations available to common shareholders 634 292 52 Income from discontinued operations attributable to Xerox Holdings, net of tax 705 55 129 Adjusted Net income available to common shareholders $ 1,339 $ 347 $ 181 Weighted-average common shares outstanding 221,969 248,707 254,341 Basic Earnings per Share: Continuing operations $ 2.86 $ 1.17 $ 0.20 Discontinued operations 3.17 0.23 0.51 Basic Earnings per Share $ 6.03 $ 1.40 $ 0.71 Diluted Earnings per Share: Net Income from continuing operations attributable to Xerox Holdings $ 648 $ 306 $ 66 Accrued dividends on preferred stock — (14 ) (14 ) Adjusted Net income from continuing operations available to common shareholders 648 292 52 Income from discontinued operations attributable to Xerox Holdings, net of tax 705 55 129 Adjusted Net income available to common shareholders $ 1,353 $ 347 $ 181 Weighted-average common shares outstanding 221,969 248,707 254,341 Common shares issuable with respect to: Stock options 55 — — Restricted stock and performance shares 4,403 2,953 2,229 Convertible preferred stock 6,742 — — Adjusted Weighted average common shares outstanding 233,169 251,660 256,570 Diluted Earnings per Share: Continuing operations $ 2.78 $ 1.16 $ 0.20 Discontinued operations 3.02 0.22 0.51 Diluted Earnings per Share $ 5.80 $ 1.38 $ 0.71 The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands): Stock options 805 1,022 — Restricted stock and performance shares 1,272 3,068 3,706 Convertible preferred stock — 6,742 6,742 Total Anti-Dilutive Securities 2,077 10,832 10,448 Dividends per Common Share $ 1.00 $ 1.00 $ 1.00 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Committed Debt Financing for Proposed Transaction with HP Inc. On January 5, 2020, Xerox entered into a commitment letter (the “Commitment Letter”), with Citigroup Global Markets Inc., Mizuho Bank, Ltd. and Bank of America, N.A. (collectively, the “Commitment Parties”), pursuant to which, subject to the terms and conditions set forth therein, the Commitment Parties have committed to provide a $19.5 billion senior unsecured 364 -day term loan bridge facility and a $4.5 billion senior unsecured 60 -day term loan bridge facility to finance Xerox’s proposed acquisition of HP Inc. The 60 -day term loan bridge facility is intended to bridge gaining access to cash on HP’s balance sheet that Xerox intends to use in a consensual transaction as a source of its acquisition financing. The funding of the debt facilities provided for in the Commitment Letter is contingent on the satisfaction of a limited number of customary conditions, including the consummation of the proposed acquisition of HP. Commitment and structuring fees up to $140 are payable on this funding commitment based on meeting certain milestones during the year with respect to the proposed transaction with HP. On January 6, 2020, Xerox issued a press release announcing that it has sent a letter to the Board of Directors of HP confirming that it has obtained $24 billion in binding financing commitments from Citi, Mizuho and Bank of America to complete its proposed business combination with HP. Termination of Technology Agreement with Fuji Xerox As disclosed in Note 12 - Investments in Affiliates, at Equity, Xerox has a Technology Agreement (TA) with Fuji Xerox whereby Xerox receives royalty payments for their use of our Xerox brand trademark, as well as rights to access our patent portfolio in exchange for access to their patent portfolio. On January 5, 2020, Fuji Xerox notified Xerox of its intention to terminate the TA on the agreement’s expiration date of March 31, 2021. The series of transactions entered into between Xerox and FH in November 2019, as disclosed in Note 7 - Divestitures, included an amendment to the TA that would allow Fuji Xerox continued use of the Xerox brand trademark for two years after the date of termination of the TA as it transitions to a new brand in exchange for an upfront prepaid fixed royalty of $100 . The extended license is effective only if exercised by Fuji Xerox at the termination of the TA at which point payment would be required. If FX does not extend the license, Xerox would be allowed sell and distribute xerographic equipment under the Xerox brand in the Fuji Xerox territory as early as April 1, 2021; if Fuji Xerox extends the license, entry into the Fuji Xerox territory would be deferred to April 1, 2023. The product supply agreements with Fuji Xerox will continue to be effective despite the termination of the TA, and Fuji Xerox and Xerox will continue to operate as each other’s product supplier. Acquisition of Arena Group In January, Xerox acquired Arena Group, one of the leading providers of office technology, software, solutions and services in the U.K., for approximately $46 (GBP 35 million ), which is net of cash acquired. This acquisition expands Xerox's presence in the small-to-medium sized (SMB) business market in Western Europe. We are currently assessing the purchase price allocation but expect the majority to be allocated to intangible assets and goodwill. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts Receivables - Allowance for doubtful accounts: (in millions) Balance at beginning of period Additions charged to bad debt provision (1) Amounts (credited) charged to other income statement accounts (1) Deductions and other, net of recoveries (2) Balance at end of period Year Ended December 31, 2019 Accounts Receivable $ 56 $ 18 $ — $ (19 ) $ 55 Finance Receivables 92 28 3 (34 ) 89 $ 148 $ 46 $ 3 $ (53 ) $ 144 Year Ended December 31, 2018 Accounts Receivable $ 59 $ 12 $ 2 $ (17 ) $ 56 Finance Receivables 108 24 2 (42 ) 92 $ 167 $ 36 $ 4 $ (59 ) $ 148 Year Ended December 31, 2017 Accounts Receivable $ 64 $ 16 $ (2 ) $ (19 ) $ 59 Finance Receivables 110 17 15 (34 ) 108 $ 174 $ 33 $ 13 $ (53 ) $ 167 _____________ (1) Bad debt provisions relate to estimated losses due to credit and similar collectibility issues. Other charges (credits) relate to adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. (2) Deductions and other, net of recoveries primarily relates to receivable write-offs, but also includes the impact of foreign currency translation adjustments and recoveries of previously written off receivables. Deferred Tax Asset Valuation Allowances: (in millions) Balance at beginning of period Additions charged to income tax expense Amounts (credited) charged to other accounts (1) Balance at end of period Year Ended December 31, 2019 $ 397 16 (14 ) $ 399 Year Ended December 31, 2018 $ 435 3 (41 ) $ 397 Year Ended December 31, 2017 $ 416 6 13 $ 435 _____________ (1) Reflects other (decreases) increases to our valuation allowance, including the effects of currency. These did not affect income tax expense in total as there was a corresponding adjustment to Deferred tax assets or Other comprehensive (loss) income. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The Consolidated Financial Statements include the accounts of Xerox Corporation and all of our controlled subsidiary companies. All significant intercompany accounts and transactions have been eliminated. Investments in business entities in which we do not have control, but we have the ability to exercise significant influence over operating and financial policies (generally 20% to 50% ownership) are accounted for using the equity method of accounting. Operating results of acquired businesses are included in the Consolidated Statements of Income from the date of acquisition. We consolidate variable interest entities if we are deemed to be the primary beneficiary of the entity. Operating results for variable interest entities in which we are determined to be the primary beneficiary are included in the Consolidated Statements of Income from the date such determination is made. For convenience and ease of reference, we refer to the financial statement caption “Income before Income Taxes and Equity Income” as “pre-tax income” throughout the Notes to the Consolidated Financial Statements. |
Discontinued Operations | Discontinued Operations In November 2019, Xerox Holdings completed a series of transactions to restructure its relationship with FUJIFILM Holdings Corporation (“FH”), including the sale of its indirect 25% equity interest in Fuji Xerox (FX) as well as the sale of its indirect 51% partnership interest in Xerox International Partners (XIP) (collectively the “Sales”). As a result of the Sales of FX and XIP and the related strategic shift in our business the historical financial results of our equity method investment in FX and our XIP business (which was consolidated) for the periods prior to the Sales are reflected as a discontinued operation and as such, their impact is excluded from continuing operations for all periods presented. The accompanying Notes to the Consolidated Financial Statements have all been revised to reflect the effect of the Sales and all prior year balances have been revised accordingly to reflect continuing operations only. The historical statements of Comprehensive Income and Shareholders' Equity have not been revised to reflect the Sales and instead reflect the Sales as an adjustment to the balances at December 31, 2019. Refer to Note 7 - Divestitures for additional information regarding discontinued operations and other divestitures. |
Use of Estimates | Use of Estimates The preparation of our Consolidated Financial Statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our Consolidated Financial Statements will change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. Our estimates are based on management's best available information including current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. |
Changes in Estimates - Methodology | Changes in Estimates In the ordinary course of accounting for the items discussed above, we make changes in estimates as appropriate and as we become aware of new or revised circumstances surrounding those estimates. Such changes and refinements in estimation methodologies are reflected in reported results of operations in the period in which the changes are made and, if material, their effects are disclosed in the Notes to the Consolidated Financial Statements and in Management's Discussion and Analysis of Financial Condition and Results of Operations. |
New Accounting Pronouncements, Policy | New Accounting Standards and Accounting Changes Except for the Accounting Standard Updates (ASUs) discussed below, the new ASUs issued by the FASB during the last two years did not have any significant impact on the Company. Accounting Standard Updates to be Adopted: Financial Instruments - Credit Losses and Derivatives In June 2016, the FASB issued ASU 2016-13 , Financial Instruments Credit Losses - Measurement of Credit Losses on Financial Instruments, with additional amendments being issued in 2018 and 2019. This update requires measurement and recognition of expected credit losses for financial assets on an expected loss model rather than an incurred loss model. The update impacts financial assets including net investment in leases that are not accounted for at fair value through Net Income. This update is effective for our fiscal year beginning January 1, 2020. The impact of the adoption of ASU 2016-13 is expected to primarily impact the estimation of our Allowance for doubtful accounts for Accounts Receivables and Finance Receivables. We currently do not expect the new guidance to have a material impact on our financial condition, results of operations or cash flows since we already apply an expected loss model in the estimation of our Allowance for doubtful accounts for Accounts Receivables and Finance Receivables and currently include assessment of current economic conditions. However, the full impact of this standard will be dependent on future economic conditions. Intangibles - Internal-Use Software In August 2018, the FASB issued ASU 2018-15 , Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The update provides criteria for determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The update also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. This update is effective for our fiscal year beginning January 1, 2020. Since we currently capitalize these implementation costs and such amounts are not material, we do not expect the new guidance to have a material impact on our financial condition, results of operations or cash flows. Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This update is effective for our fiscal year beginning January 1, 2021. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements. Accounting Standard Updates Recently Adopted: Leases On January 1, 2019, we adopted ASU 2016-02 , Leases (ASC Topic 842). This update, as well as additional amendments and targeted improvements issued in 2018 and early 2019, supersedes existing lease accounting guidance found under ASC 840, Leases (“ASC 840”) and requires the recognition of right-to-use assets and lease obligations by lessees for those leases originally classified as operating leases under prior lease guidance. Effective with the adoption, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. Short-term leases with a term of 12 months or less are not required to be recognized. The update also requires qualitative and quantitative disclosure of key information regarding the amount, timing and uncertainty of cash flows arising from leasing arrangements to increase transparency and comparability among companies. The accounting for lessors does not fundamentally change with this update except for changes to conform and align guidance to the lessee guidance, as well as to the revenue recognition guidance in ASU 2014-09. Some of these conforming changes, such as those related to the definition of lease term and minimum lease payments, resulted in certain lease arrangements, that would have been previously accounted for as operating leases, to be classified and accounted for as sales-type leases with a corresponding up-front recognition of equipment sales revenue. Upon adoption, we applied the transition option, whereby prior comparative periods are not retrospectively presented in the Consolidated Financial Statements. We also elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components for certain asset classes (real estate lease arrangements for offices and warehouses). Additionally, we made a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes. We elected the package of practical expedients from both the Lessee and Lessor prospective, to the extent applicable. Lessee accounting - the adoption of this update resulted in an increase to assets and related liabilities of approximately $385 (approximately $440 undiscounted) primarily related to leases of facilities. Refer to Note 2 - Adoption of New Leasing Standard - Lessee for additional information related to our lessee accounting. Lessor accounting - the adoption of this update resulted in an increase to equipment sales by approximately $30 in 2019 as compared to 2018. Refer to Note 3 - Adoption of New Leasing Standard - Lessor for additional information related to our lessor accounting. Financial Instruments - Derivatives In August 2017, the FASB issued ASU 2017-12 , Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, with additional updates and amendments being issued in 2018 and 2019 . The amendments in this update expand and refine hedge accounting for both financial and non-financial risk components, align the recognition and presentation of the effects of hedging instruments with the same income statement line item that the hedged item is reported and include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. We adopted ASU 2017-12 effective for our fiscal year beginning January 1, 2019, and it did not have a material impact on our financial condition, results of operations or cash flows. Income Taxes In February 2018, the FASB issued ASU 2018-02 , Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . We adopted ASU 2018-02 effective for our fiscal year beginning January 1, 2019 and upon adoption reclassified $127 from Accumulated other comprehensive loss (AOCL) to Retained earnings related to the stranded tax effects resulting from the Tax Cuts and Jobs Act (Tax Act) enacted in December 2017. The reclassification was primarily related to the stranded tax effects associated with amounts in AOCL from our retirement-related benefit plans. Accordingly, the adoption of this update eliminated the stranded tax effects resulting from the Tax Act. However, because the update only relates to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in Income from continuing operations is not affected. Revenue Recognition On January 1, 2018, we adopted ASU 2014-09 , Revenue from Contracts with Customers (ASC Topic 606), which superseded nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASC Topic 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC Topic 606 defines a five-step process to recognize revenue and requires more judgment and estimates within the revenue recognition process than required under previous U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. We adopted this standard using the modified retrospective method of adoption and therefore we did not revise periods prior to adoption (e.g. 2017). Under ASC Topic 606, based on the nature of our contracts and consistent with prior practice, we recognize revenue upon invoicing the customer for the large majority of our revenue. Additionally, the unit of accounting, that is, the identification of performance obligations, is consistent with prior revenue recognition practice. Accordingly, the adoption of this standard did not have a material impact for the large majority of our revenues. A significant portion of our Equipment sales are either recorded as sales-type leases or through direct sales to distributors and resellers and these revenue streams are not impacted by the adoption of ASC Topic 606. The only change of significance identified in our adoption involves a change in the classification of certain revenues that were previously reported in Services revenues. These revenues relate to certain analyst services performed in connection with the installation of equipment that are being considered part of the equipment sale performance obligation effective beginning January 1, 2018. Accordingly, these revenues are now reported as part of Sales. For the year ended December 31, 2017, we reported $44 as Services, which would have been reported as Sales under the new standard. Another change identified upon adoption was with respect to deferred contract costs, which include incremental costs of obtaining a contract and costs to fulfill a contract. Deferred contract costs had been minimal under our prior practices as most costs to obtain a contract and fulfill a contract were expensed as incurred. However, as a result of the contract cost guidance included in ASC Topic 606 and ASC Topic 340-40 " Contracts with Customers ", upon adoption on January 1, 2018, we recorded a transition asset of $153 , and a net of tax increase of $117 to Retained earnings, related to the incremental cost to obtain contracts. Substantially all of this adjustment is related to the deferral of sales commissions paid to sales people and agents in connection with the placement of equipment with post sale service arrangements. The impact to the Statement of Income from this change is not material. Other Updates The FASB also issued the following Accounting Standards Updates, which have not had, and are not expected to have, a material impact on our financial condition, results of operations or cash flows upon adoption. Those updates are as follows: • Investments: ASU 2020-01 , Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) . This update is effective for our fiscal year beginning January 1, 2021. • Compensation - Stock Compensation and Revenue from Contracts with Customers: ASU 2019-08 , (Topic 718) and (Topic 606) Codification Improvements - Share-Based Consideration Payable to a Customer. This update is effective for our fiscal year beginning January 1, 2020. • Collaborative Arrangements: ASU 2018-18 , (Topic 808) Clarifying the Interaction between Topic 808 and Topic 606. This update is effective for our fiscal year beginning January 1, 2020. • Compensation - Retirement Benefits - Defined Benefit Plans - General: ASU 2018-14 , (Topic 715-20) Changes to the Disclosure Requirements for Defined Benefit Plans. We elected to early adopt this update effective for our fiscal year ended December 31, 2019. Refer to Note 19 - Employee Benefit Plans for changes in the disclosures for our Defined Benefit Plans. • Fair Value Measurement: ASU 2018-13 , (Topic 820) Disclosure Framework. This update is effective for our fiscal year beginning January 1, 2020. |
Revenue Recognition | Revenue Recognition (Policies subsequent to the adoption of ASU 2014-09 - ASC Topic 606) The revenue recognition policies that follow are applicable for the periods subsequent to the adoption of ASC Topic 606, which was adopted on a modified prospective basis effective January 1, 2018 - the years ended December 31, 2019 and 2018. Refer to the section Revenue Recognition (Policies prior to the adoption of ASU 2014-09 - ASC Topic 606) below, for the revenue recognition policies prior to the adoption of ASU Topic 606, which were applicable for the year ended December 31, 2017. We generate revenue through the sale of equipment, supplies and maintenance and printing services. Revenue is measured based on consideration specified in a contract with a customer and is recognized when we satisfy a performance obligation by transferring control of a product to a customer or in the period the customer benefits from the service. With the exception of our sales-type lease arrangements, our invoices to the customer, which normally have short-term payment terms, are typically aligned to the transfer of goods or as services are rendered to our customers and therefore in most cases we recognize revenue based on our right to invoice customers. As a result of the application of this practical expedient for the substantial portion of our revenue, the disclosure of the value of unsatisfied performance obligations for our services is not required. Significant judgments primarily include the identification of performance obligations in our Document management services arrangements as well the pattern of delivery for those services. More specifically, revenue related to our products and services is generally recognized as follows: Equipment: Revenues from the sale of equipment directly to end customers, including those from sales-type leases (see below), are recognized when obligations under the terms of a contract with our customer are satisfied and control has been transferred to the customer. For equipment placements that require us to install the product at the customer location, revenue is normally recognized when the equipment has been delivered and installed at the customer location. Sales of customer installable products are recognized upon shipment or receipt by the customer according to the customer's shipping terms. Revenue from the equipment performance obligation also includes certain analyst training services performed in connection with the installation or delivery of the equipment . Maintenance services: We provide maintenance agreements on our equipment that include service and supplies for which the customer may pay a base minimum plus a price-per-page charge for usage. In arrangements that include minimums, those minimums are normally set below the customer’s estimated page volumes and are not considered substantive. These agreements are sold as part of a bundled lease arrangement or through distributors and resellers. We normally account for these maintenance agreements as a single performance obligation for printing services being delivered in a series with delivery being measured by usage as billed to the customer. Accordingly, revenue on these agreements are normally recognized as billed to the customer over the term of the agreements based on page volumes. A substantial portion of our products are sold with full service maintenance agreements, accordingly, other than the product warranty obligations associated with certain of our entry level products, we do not have any significant warranty obligations, including any obligations under customer satisfaction programs. Document management services: Revenues associated with our document management services are generally recognized as printing services are rendered, which is generally on the basis of the number of images produced. Revenues on unit-price contracts are recognized at the contractual selling prices as work is completed by the customer. We account for these arrangements as a single performance obligation for printing services being delivered in a series with delivery being measured by usage as billed to the customer . Our services contracts may also include the sale or lease of equipment and software. In these instances, we follow the policies noted for Equipment or Software Revenues and separately report the revenue associated with these performance obligations. Certain document management services arrangements may also include an embedded lease of equipment. In these instances, the revenues associated with the lease are recognized in accordance with the requirements for lease accounting. Sales to distributors and resellers: We utilize distributors and resellers to sell our equipment, supplies and maintenance services to end-user customers. We refer to our distributor and reseller network as our two-tier distribution model. Revenues on sales to distributors and resellers are generally recognized when products are shipped to such distributors and resellers. However, revenue is only recognized when the distributor or reseller has economic substance apart from the Company such that collectability is probable and we have no further obligations related to bringing about the resale, delivery or installation of the product that would impact transfer of control. Revenues associated with maintenance agreements sold through distributors and resellers to end customers are recognized in a consistent manner to maintenance services. Revenue that may be subject to a reversal of revenue due to contractual terms or uncertainties is not recorded as revenue until the contractual provisions lapse or the uncertainties are resolved. Distributors and resellers participate in various rebate, price-protection, cooperative marketing and other programs, and we estimate the variable consideration associated with these programs and record those amounts as a reduction to revenue when the sales occur. Similarly, we account for our estimates of sales returns and other allowances when the sales occur based on our historical experience. In certain instances, we may provide lease financing to end-user customers who purchased equipment we sold to distributors or resellers. We are not obligated to provide financing and we compete with other third-party leasing companies with respect to the lease financing provided to these end-user customers. Software: Most of our equipment has both software and non-software components that function together to deliver the equipment's essential functionality and therefore they are accounted for together as part of Equipment sales revenues. Software accessories sold in connection with our Equipment sales, as well as free-standing software sales are accounted for as separate performance obligations if determined to be material in relation to the overall arrangement. Revenue from software is not a significant component of our Total revenues. Supplies: Supplies revenue is recognized upon transfer of control to the customer, generally upon utilization or shipment to the customer in accordance with the sales contract terms. Financing: Finance income attributable to sales-type leases, direct financing leases and installment loans is recognized on the accrual basis using the effective interest method. Bundled Lease Arrangements: A significant portion of our direct sales of equipment to end customers are made through bundled lease arrangements that typically include equipment, maintenance and financing components for which the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of contractual page volume minimums, which are often expressed in terms of price-per-page. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed minimum payments that the customer is obligated to make (fixed payments) over the lease term. In applying our lease accounting methodology, we only consider the fixed payments for purposes of allocating to the relative fair value elements of the contract. Revenues under bundled arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment, financing, maintenance and other executory costs, while non-lease deliverables generally consist of the supplies and non-maintenance services. The allocation for the lease deliverables begins by allocating revenues to the maintenance and other executory costs plus a profit thereon. These elements are generally recognized over the term of the lease as service revenue. The remaining amounts are allocated to the equipment and financing elements, which are subjected to the accounting estimates noted below under “Leases”. Leases: The two primary lease accounting provisions we assess for the classification of transactions as sales-type or operating leases are: (1) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the equipment and (2) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized as noted above for Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. We consider the economic life of most of our products to be five years, since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years. There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. Residual values are not significant. With respect to fair value, we perform an analysis of equipment fair value based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices are indicative of fair value. Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. These interest rates have generally been adjusted if the rates vary by 25 basis points or more, cumulatively, from the rate last in effect. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices. Note: The above two revenue recognition policies apply to 2018 and were updated as a result of our adoption of ASC Topic 842 effective January 1, 2019. Refer to Note 3 - Adoption of New Leasing Standard - Lessor for the updated policies. Other Revenue Recognition Policies Revenue-based Taxes: Revenue-based taxes assessed by governmental authorities that are both imposed on and concurrent with specific revenue-producing transactions, and that are collected by the Company from a customer, are excluded from revenue. The primary revenue-based taxes are sales tax and value-added tax (VAT). Shipping and Handling: Shipping and handling costs are accounted for as a fulfillment cost and are included in Cost of sales in the Consolidated Statements of Income. Refer to Note 4 - Revenue for additional information regarding revenue recognition policies with respect to contract assets and liabilities as well as contract costs. |
Revenue Recognition | Revenue Recognition (Policies prior to the adoption of ASU 2014-09 - ASC Topic 606) We generate revenue through services, the sale and rental of equipment, supplies and income associated with the financing of our equipment sales. Revenue is recognized when it is realized or realizable and earned. We consider revenue realized or realizable and earned when we have persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. Delivery does not occur until equipment has been shipped or services have been provided to the customer, risk of loss has transferred to the customer, and either customer acceptance has been obtained, customer acceptance provisions have lapsed, or the company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied. The sales price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved. More specifically, revenue related to services and sales of our products is recognized as follows: Equipment: Revenues from the sale of equipment, including those from sales-type leases, are recognized at the time of sale or at the inception of the lease, as appropriate. For equipment sales that require us to install the product at the customer location, revenue is recognized when the equipment has been delivered and installed at the customer location. Sales of customer installable products are recognized upon shipment or receipt by the customer according to the customer's shipping terms. Revenues from equipment under other leases and similar arrangements are accounted for by the operating lease method and are recognized as earned over the lease term, which is generally on a straight-line basis. Maintenance Services: Maintenance service revenues are derived primarily from maintenance contracts on the equipment sold to our customers and are recognized over the term of the contracts. A substantial portion of our products are sold with full service maintenance agreements for which the customer typically pays a base service fee plus a variable amount based on usage. As a consequence, other than the product warranty obligations associated with certain of our low end products, we do not have any significant product warranty obligations, including any obligations under customer satisfaction programs. Bundled Lease Arrangements: We sell our products and services under bundled lease arrangements, which typically include equipment, service, supplies and financing components for which the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of contractual page volume minimums, which are often expressed in terms of price-per-page. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed minimum payments that the customer is obligated to make (fixed payments) over the lease term. The payments associated with page volumes in excess of the minimums are contingent on whether or not such minimums are exceeded (contingent payments). In applying our lease accounting methodology, we only consider the fixed payments for purposes of allocating to the relative fair value elements of the contract. Contingent payments, if any, are recognized as revenue in the period when the customer exceeds the minimum copy volumes specified in the contract. Revenues under bundled arrangements are allocated considering the relative selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment, financing, maintenance and other executory costs, while non-lease deliverables generally consist of the supplies and non-maintenance services. The allocation for the lease deliverables begins by allocating revenues to the maintenance and other executory costs plus a profit thereon. These elements are generally recognized over the term of the lease as service revenue. The remaining amounts are allocated to the equipment and financing elements which are subjected to the accounting estimates noted below under “Leases.” Our pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. These interest rates have generally been adjusted if the rates vary by 25 basis points or more, cumulatively, from the rate last in effect. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices. Sales to distributors and resellers: We utilize distributors and resellers to sell many of our technology products, supplies and services to end-user customers. We refer to our distributor and reseller network as our two-tier distribution model. Sales to distributors and resellers are generally recognized as revenue when products are sold to such distributors and resellers. However, revenue is only recognized when the distributor or reseller has economic substance apart from the company, the sales price is not contingent upon resale or payment by the end user customer and we have no further obligations related to bringing about the resale, delivery or installation of the product. Distributors and resellers participate in various rebate, price-protection, cooperative marketing and other programs, and we record provisions for these programs as a reduction to revenue when the sales occur. Similarly, we account for our estimates of sales returns and other allowances when the sales occur based on our historical experience. In certain instances, we may provide lease financing to end-user customers who purchased equipment we sold to distributors or resellers. We compete with other third-party leasing companies with respect to the lease financing provided to these end-user customers. Supplies: Supplies revenue generally is recognized upon shipment or utilization by customers in accordance with the sales contract terms. Software: |
Leases | Leases: As noted above, equipment may be placed with customers under bundled lease arrangements. The two primary accounting provisions which we use to classify transactions as sales-type or operating leases are: (1) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the equipment and (2) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. We consider the economic life of most of our products to be five years , since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years . There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. Residual values are not significant. With respect to fair value, we perform an analysis of equipment fair value based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices are indicative of fair value. |
Financing | Financing: Finance income attributable to sales-type leases, direct financing leases and installment loans is recognized on the accrual basis using the effective interest method. |
Services | Services: Revenues associated with our document management services are generally recognized as services are rendered, which is generally on the basis of the number of transactions processed. In service arrangements where final acceptance of a printing solution by the customer is required, revenue is deferred until all acceptance criteria have been met. Revenues on unit-price contracts are recognized at the contractual selling prices as work is completed and accepted by the customer. In connection with our services arrangements, we may incur and capitalize costs to originate these long-term contracts and to perform the migration, transition and setup activities necessary to enable us to perform under the terms of the arrangement. These capitalized costs are amortized over the contractual service period of the arrangement to cost of services. From time to time, we also provide inducements to customers in various forms, including contractual credits, which are capitalized and amortized as a reduction of revenue over the term of the contract. Long-lived assets used in the fulfillment of service arrangements are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific. Our services contracts may also include the sale of equipment and software. In these instances, we follow the policies noted above under Equipment-Related Revenues. |
Multiple Element Arrangements | Multiple Element Arrangements: As described above, we enter into the following revenue arrangements that may consist of multiple deliverables: • Bundled lease arrangements, which typically include both lease deliverables and non-lease deliverables as described above. • Contracts for multiple types of document related services including professional and value-added services. For instance, we may contract for an implementation of a printing solution and also provide services to operate the solution over a period of time; or we may contract to scan, manage and store customer documents. In substantially all of our multiple element arrangements, we are able to separate the deliverables since we normally will meet both of the following criteria: • The delivered item(s) has value to the customer on a stand-alone basis; and • If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. |
Income Tax, Policy | Revenue-based Taxes: We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The primary revenue-based taxes are sales tax and value-added tax (VAT). |
Shipping and Handling | Shipping and Handling Costs related to shipping and handling are recognized as incurred and included in Cost of sales in the Consolidated Statements of Income. |
Research, Development and Engineering (RD&E) | Research, Development and Engineering (RD&E) |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Receivable Sales | Receivable Sales We transfer certain portions of our receivable portfolios and normally account for those transfers as sales based on meeting the criteria for derecognition in accordance with ASC Topic 860 "Transfer and Servicing" of Financial Assets. Gains or losses on the sale of receivables depend, in part, on both (a) the cash proceeds and (b) the net non-cash proceeds received or paid. When we sell receivables, we normally receive beneficial interests in the transferred receivables from the purchasers as part of the proceeds. We may refer to these beneficial interests as a deferred purchase price. The beneficial interests obtained are initially measured at their fair value. We generally estimate fair value based on the present value of expected future cash flows, which are calculated using management ' s best estimates of the key assumptions including credit losses, prepayment rate and discount rates commensurate with the risks involved. Refer to Note 8 - Accounts Receivable, Net for additional information on our receivable sales . |
Inventories | Inventories Inventories are carried at the lower of average cost or net realizable value. Inventories also include equipment that is returned at the end of the lease term. Returned equipment is recorded at the lower of remaining net book value or salvage value, which is normally not significant. We regularly review inventory quantities and record a provision for excess and/or obsolete inventory based primarily on our estimated forecast of product demand, production requirements and servicing commitments. Several factors may influence the realizability of our inventories, including our decision to exit a product line, technological changes and new product development. The provision for excess and/or obsolete raw materials and equipment inventories is based primarily on near term forecasts of product demand and include consideration of new product introductions, as well as changes in remanufacturing strategies. The provision for excess and/or obsolete service parts inventory is based primarily on projected servicing requirements over the life of the related equipment populations. Refer to Note 10 - Inventories and Equipment on Operating Leases, Net for further discussion. |
Land, Buildings and Equipment on Operating Leases | Land, Buildings and Equipment on Operating Leases |
Software - Internal Use and Product | Software - Internal Use and Product We capitalize direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortize these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented (Internal Use Software). Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Amounts expended for Internal Use Software are included in Cash Flows from Investing. We also capitalize certain costs related to the development of software solutions to be sold to our customers upon reaching technological feasibility (Product Software). These costs are amortized on a straight-line basis over the estimated economic life of the software. Amounts expended for Product Software are included in Cash Flows from Operations. We perform periodic reviews to ensure that unamortized Product Software costs remain recoverable from estimated future operating profits (net realizable value or NRV). Costs to support or service licensed software are charged to Costs of services as incurred. Refer to Note 11 - Land, Buildings, Equipment and Software, Net for further information. |
Capitalization of Internal Costs | Software - Internal Use and Product We capitalize direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortize these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented (Internal Use Software). Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Amounts expended for Internal Use Software are included in Cash Flows from Investing. We also capitalize certain costs related to the development of software solutions to be sold to our customers upon reaching technological feasibility (Product Software). These costs are amortized on a straight-line basis over the estimated economic life of the software. Amounts expended for Product Software are included in Cash Flows from Operations. We perform periodic reviews to ensure that unamortized Product Software costs remain recoverable from estimated future operating profits (net realizable value or NRV). Costs to support or service licensed software are charged to Costs of services as incurred. Refer to Note 11 - Land, Buildings, Equipment and Software, Net for further information. |
Goodwill and Other Intangible Assets, Impairment of Long-Lived Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the fair value of acquired net assets in a business combination, including the amount assigned to identifiable intangible assets. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the company and the acquired assembled workforce, neither of which qualifies as an identifiable intangible asset. Goodwill is not amortized, but rather is tested for impairment annually, or more frequently whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable and an impairment loss may have been incurred. We normally assess goodwill for impairment at least annually, during the fourth quarter based on balances as of October 1 st , and more frequently if indicators of impairment exist or if a decision is made to sell or exit a business. Impairment testing for goodwill is done at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (a component) if the component constitutes a business for which discrete financial information is available, and segment management regularly reviews the operating results of that component. Consistent with the determination that we had one operating segment, we determined that there is one reporting unit and tested goodwill for impairment at the entity level. We perform an assessment of goodwill, utilizing either a qualitative or quantitative impairment test. The qualitative impairment test assesses several factors to determine whether it is more likely than not that the fair value of the entity is less than its carrying amount. If we conclude it is more likely than not that the fair value of the entity is less than its carrying amount, a quantitative fair value test is performed. In certain circumstances, we may also bypass the qualitative test and proceed directly to a quantitative impairment test. In a quantitative impairment test, we assess goodwill by comparing the carrying amount of the entity to its fair value. Fair value of the entity is determined by using a weighted combination of an income approach and a market approach. If the fair value exceeds the carrying value, goodwill is not considered impaired. If the carrying value exceeds the fair value, goodwill is considered impaired and we would recognize an impairment loss for the excess. Other intangible assets primarily consist of assets obtained in connection with business acquisitions, including installed customer base and distribution network relationships, existing technology, trademarks and non-compete agreements. We apply an impairment evaluation whenever events or changes in business circumstances indicate that the carrying value of our intangible assets may not be recoverable. Other intangible assets are amortized on a straight-line basis over their estimated economic lives. We believe that the straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained annually by the Company. Refer to Note 13 - Goodwill and Intangible Assets, Net for further information. |
Impairment or Disposal of Long-Lived Assets | Impairment of Long-Lived Assets We review the recoverability of our long-lived assets, including buildings, equipment, right-of-use leased assets, internal use software and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. Long-lived assets to be disposed of by sale are reported at the lower of carrying amount or fair value less costs to sell. Long-lived assets to be disposed of other than by sale (e.g., by abandonment, cease-use) would continue to be classified as held and used until the long-lived asset is disposed of (e.g. abandoned or when asset ceases to be used). |
Pension and Post-Retirement Benefit Obligations | Pension and Post-Retirement Benefit Obligations We sponsor various forms of defined benefit pension plans in several countries covering employees who meet eligibility requirements. Retiree health benefit plans cover U.S. and Canadian employees for retiree medical costs. We employ a delayed recognition feature in measuring the costs of pension and post-retirement benefit plans. This requires changes in the benefit obligations and changes in the value of assets set aside to meet those obligations to be recognized not as they occur, but systematically and gradually over subsequent periods. All changes are ultimately recognized as components of net periodic benefit cost, except to the extent they may be offset by subsequent changes. At any point, changes that have been identified and quantified but not recognized as components of net periodic benefit cost are recognized in Accumulated other comprehensive loss, net of tax. Several statistical and other factors that attempt to anticipate future events are used in calculating the expense, liability and asset values related to our pension and retiree health benefit plans. These factors include assumptions we make about the discount rate, expected return on plan assets, cash balance interest-crediting rate, rate of increase in healthcare costs, the rate of future compensation increases and mortality. Actual returns on plan assets are not immediately recognized in our income statement due to the delayed recognition requirement. In calculating the expected return on the plan asset component of our net periodic pension cost, we apply our estimate of the long-term rate of return on the plan assets that support our pension obligations, after deducting assets that are specifically allocated to Transitional Retirement Accounts (which are accounted for based on specific plan terms). For purposes of determining the expected return on plan assets, we utilize a market-related value approach in determining the value of the pension plan assets, rather than a fair market value approach. The primary difference between the two methods relates to systematic recognition of changes in fair value over time (generally two years ) versus immediate recognition of changes in fair value. Our expected rate of return on plan assets is applied to the market-related asset value to determine the amount of the expected return on plan assets to be used in the determination of the net periodic pension cost. The market-related value approach reduces the volatility in net periodic pension cost that would result from using the fair market value approach. The discount rate is used to present value our future anticipated benefit obligations. The discount rate reflects the current rate at which benefit liabilities could be effectively settled considering the timing of expected payments for plan participants. In estimating our discount rate, we consider rates of return on high-quality fixed-income investments adjusted to eliminate the effects of call provisions, as well as the expected timing of pension and other benefit payments. Each year, the difference between the actual return on plan assets and the expected return on plan assets, as well as increases or decreases in the benefit obligation as a result of changes in the discount rate and other actuarial assumptions, are added to or subtracted from any cumulative actuarial gain or loss from prior years. This amount is the net actuarial gain or loss recognized in Accumulated other comprehensive loss. We amortize net actuarial gains and losses as a component of net pension cost for a year if, as of the beginning of the year, that net gain or loss (excluding asset gains or losses that have not been recognized in market-related value) exceeds 10% of the greater of the projected benefit obligation or the market-related value of plan assets (the corridor method). This determination is made on a plan-by-plan basis. If amortization is required for a particular plan, we amortize the applicable net gain or loss in excess of the 10% threshold on a straight-line basis in net periodic pension cost over the remaining service period of the employees participating in that pension plan. In plans where substantially all participants are inactive, the amortization period for the excess is the average remaining life expectancy of the plan participants. Our primary domestic plans allow participants the option of settling their vested benefits through the receipt of a lump-sum payment. The participant ' s vested benefit is considered fully settled upon payment of the lump sum. We have elected to apply settlement accounting and therefore we recognize the losses associated with settlements in this plan immediately upon the settlement of the vested benefits. Settlement accounting requires us to recognize a pro rata portion of the aggregate unamortized net actuarial losses upon settlement. The pro rata factor is computed as the percentage reduction in the projected benefit obligation due to the settlement of the participant ' s vested benefit. Refer to Note 19 - Employee Benefit Plans for further information regarding our Pension and Post-Retirement Benefit Obligations . |
Foreign Currency Translation and Remeasurement | Foreign Currency Translation and Remeasurement The functional currency for most of our foreign operations is the local currency. Net assets are translated at current rates of exchange and income, expense and cash flow items are translated at average exchange rates for the applicable period. The translation adjustments are recorded in Accumulated other comprehensive loss. The U.S. Dollar is used as the functional currency for certain foreign subsidiaries that conduct their business in U.S. Dollars as well as foreign subsidiaries operating in highly inflationary economies. For these subsidiaries, non-monetary foreign currency assets and liabilities are translated using historical rates, while monetary assets and liabilities are translated at current rates, with the U.S. dollar effects of rate changes recorded in Currency (gains) and losses within Other expenses, net together with other foreign currency remeasurements. |
Lessee Leases | Lessee Accounting Policies: We determine at inception whether an arrangement is a lease. Our leases do not include assets of a specialized nature, or the transfer of ownership at the end of the lease, and the exercise of end-of-lease purchase options, which are primarily in our equipment leases, is not reasonably assured at lease inception. Accordingly, the two primary criteria we use to classify transactions as operating or finance leases are: (i) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the asset, and (ii) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the asset at the inception of the lease. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We also assess arrangements for goods or services to determine if the arrangement contains a lease at its inception. This assessment first considers whether there is an implicitly or explicitly identified asset in the arrangement and then whether there is a right to control the use of the asset. If there is an embedded lease within a contract, the Company determines the classification of the lease at the lease inception date consistent with standalone leases of assets. Operating leases are included in Other long-term assets, Accrued expenses and other current liabilities, and Other long-term liabilities in our Consolidated Balance Sheets. Finance leases are included in Land, buildings and equipment, net, Accrued expenses and other current liabilities, and Other long-term liabilities in our Consolidated Balance Sheets. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for almost all of our leases is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that we would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. The rate is dependent on several factors, including the lease term and currency of the lease payments. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as we do not have reasonable certainty at lease inception that these options will be exercised. We generally consider the economic life of our operating lease ROU assets to be comparable to the useful life of similar owned assets. We have elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Our leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. These components are accounted for separately for vehicle and equipment leases. We account for the lease and non-lease components as a single lease component for real estate leases of offices and warehouses. We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets. We review the recoverability of our long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. We have elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. Lessee Summary: Operating Leases We have operating leases for real estate and vehicles in our domestic and international operations and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms of up to eleven years and a variety of renewal and/or termination options. |
Lessor Leases | Lessor Accounting Policies: The following represent the updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842 effective January 1, 2019: Bundled Lease Arrangements: A portion of our direct sales of equipment to end customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies. Consistent with the guidance in ASC 842 and ASC 606, regarding the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed lease payments that the customer is obligated to make over the lease term. Amounts allocated to the equipment and financing elements are then subjected to the accounting estimates noted below under Leases to ensure the values reflect standalone selling prices. The remainder of any fixed payments, as well as the variable payments, are allocated to non-lease elements because the variable consideration for incremental page volume or usage is considered attributable to the delivery of those elements. The consideration for the non-lease elements is not dependent on the consideration for equipment and vice versa and the consideration for the equipment and services is priced at the appropriate standalone values; therefore, the relative standalone selling price allocation method is not necessary. The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series with delivery being measured as the usage billed to the customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance and Services agreements (Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies). Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75%); and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90%). Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease. We consider the economic life of most of our products to be five years , since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years . There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. We perform an analysis of the stand-alone selling price of equipment based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices reflects stand-alone value. Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above. Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay to third parties are considered variable payments and are recorded as other revenues and other cost of revenues, respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party. Presentation: Revenue from sales-type leases is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs. |
Other Revenue Recognition | Contract assets and liabilities: We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time. Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advanced billings for maintenance and other services to be performed and were approximately $137 and $116 at December 31, 2019 and 2018 , respectively. The majority of the balance at December 31, 2019 will be amortized to revenue over approximately the next 30 months . Contract Costs: Incremental direct costs of obtaining a contract primarily include sales commissions paid to sales people and agents in connection with the placement of equipment with associated post sale services arrangements. These costs are deferred and amortized on the straight-line basis over the estimated contract term , which is currently estimated to be approximately four years . We pay commensurate sales commissions upon customer renewals, therefore our amortization period is aligned to our initial contract term. Year Ended December 31, 2019 2018 Incremental direct costs of obtaining a contract $ 78 $ 84 Amortization of incremental direct costs 88 95 The balance of deferred incremental direct costs net of accumulated amortization at December 31, 2019 and 2018 was $163 and $172 , respectively. This amount is expected to be amortized over its estimated period of benefit, which we currently estimate to be approximately four years . We may also incur costs associated with our services arrangements to generate or enhance resources and assets that will be used to satisfy our future performance obligations included in these arrangements. These costs are considered contract fulfillment costs and are amortized over the contractual service period of the arrangement to cost of services. In addition, we also provide inducements to certain customers in various forms, including contractual credits, which are capitalized and amortized as a reduction of revenue over the term of the contract. Amounts deferred associated with contract fulfillment costs and inducements were $13 and $12 at December 31, 2019 and 2018 , respectively, and related amortization was $5 and $5 for the years ended December 31, 2019 and 2018, respectively. Equipment and software used in the fulfillment of service arrangements and where the Company retains control are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific. |
Interest Expense, Policy | Equipment financing interest is determined based on an estimated cost of funds, applied against the estimated level of debt required to support our net finance receivables. The estimated cost of funds is based on the interest cost associated with actual borrowings determined to be in support of the leasing business. The estimated level of debt continues to be based on an assumed 7 to 1 leverage ratio of debt/equity as compared to our average finance receivable balance during the applicable period. |
Fair Value of Financial Assets and Liabilities | We utilize the income approach to measure the fair value for our derivative assets and liabilities. The income approach uses pricing models that rely on market observable inputs such as yield curves, currency exchange rates and forward prices, and therefore are classified as Level 2. Fair value for our deferred compensation plan investments in mutual funds is based on quoted market prices for those funds. Fair value for deferred compensation plan liabilities is based on the fair value of investments corresponding to employees’ investment selections. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Restatement to prior year income | Prior year amounts were also revised as follows to conform to the 2019 presentation. Year Ended December 31, 2018 As Reported (1) Change As Revised Sales $ 3,805 $ (351 ) $ 3,454 Services, maintenance and rentals 5,589 351 5,940 Cost of sales $ 2,305 $ (117 ) $ 2,188 Cost of services, maintenance and rentals 3,356 117 3,473 Year Ended December 31, 2017 As Reported (1) Change As Revised Sales $ 3,801 $ (389 ) $ 3,412 Services, maintenance and rentals 5,896 389 6,285 Cost of sales $ 2,273 $ (140 ) $ 2,133 Cost of services, maintenance and rentals 3,514 140 3,654 _____________ (1) As reported amounts have been restated to reflect the sale of our investment of XIP. Refer to Note 7 - Divestitures for additional information. |
Adoption of New Leasing Stand_3
Adoption of New Leasing Standard - Lessee (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of components of lease expense | The components of lease expense are as follows: Year Ended December 31, 2019 Operating lease expense $ 125 Short-term lease expense 21 Variable lease expense (1) 48 Sublease income (1 ) Total Lease expense $ 193 _____________ (1) Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as well as taxes and insurance. |
Schedule of operating leases assets and liabilities | Operating leases ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows: December 31, Other long-term assets $ 319 Accrued expenses and other current liabilities $ 87 Other long-term liabilities 260 Total Operating lease liabilities $ 347 |
Schedule of supplemental information related to operating leases | Supplemental information related to operating leases is as follows: December 31, Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows $ 126 Right-of-use assets obtained in exchange for new lease liabilities (1) 75 Weighted-average remaining lease term 4 years Weighted-average discount rate 5.47 % _____________ (1) Includes the impact of new leases as well as remeasurements and modifications to existing leases. |
Schedule of maturities and additional information related to operating lease liabilities | Maturities and additional information related to operating lease liabilities are as follows: December 31, 2020 $ 109 2021 87 2022 73 2023 56 2024 24 Thereafter 45 Total Lease payments 394 Less: Imputed interest 47 Total Operating lease liabilities $ 347 |
Schedule of future minimum rental payments for operating leases | Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows: December 31, 2019 $ 114 2020 88 2021 64 2022 50 2023 36 Thereafter 27 Total Operating lease commitments $ 379 December 31, 2019 2018 12 months $ 226 $ 260 24 months 139 178 36 months 84 111 48 months 39 61 60 months 12 21 Thereafter 2 2 Total $ 502 $ 633 |
Adoption of New Leasing Stand_4
Adoption of New Leasing Standard - Lessor (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Components of lease income | The components of lease income are as follows: Location in Statements of Income Year Ended December 31, 2019 2018 Lease income - sales type Sales $ 672 $ 699 Interest income on lease receivables Financing 244 268 Lease income - operating leases Services, maintenance and rentals 396 438 Variable lease income Services, maintenance and rentals 107 120 Total Lease income $ 1,419 $ 1,525 |
Components of lease income | The components of lease income are as follows: Location in Statements of Income Year Ended December 31, 2019 2018 Lease income - sales type Sales $ 672 $ 699 Interest income on lease receivables Financing 244 268 Lease income - operating leases Services, maintenance and rentals 396 438 Variable lease income Services, maintenance and rentals 107 120 Total Lease income $ 1,419 $ 1,525 |
Components of lease income | The components of lease income are as follows: Location in Statements of Income Year Ended December 31, 2019 2018 Lease income - sales type Sales $ 672 $ 699 Interest income on lease receivables Financing 244 268 Lease income - operating leases Services, maintenance and rentals 396 438 Variable lease income Services, maintenance and rentals 107 120 Total Lease income $ 1,419 $ 1,525 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows: Year Ended December 31, 2019 2018 2017 Primary geographical markets (1) United States $ 5,429 $ 5,610 $ 5,790 Europe 2,326 2,625 2,697 Canada 518 569 648 Other 793 858 856 Total Revenues $ 9,066 $ 9,662 $ 9,991 Major product and services lines Equipment (2) $ 2,062 $ 2,178 $ 2,152 Supplies, paper and other sales 1,165 1,276 1,260 Maintenance agreements (3) 2,372 2,603 2,809 Service arrangements (4) 2,517 2,674 2,722 Rental and other 706 663 754 Financing 244 268 294 Total Revenues (5) $ 9,066 $ 9,662 $ 9,991 Sales channels: Direct equipment lease (6) $ 672 $ 699 $ 718 Distributors & resellers (7) 1,343 1,445 1,502 Customer direct 1,212 1,310 1,192 Total Sales $ 3,227 $ 3,454 $ 3,412 _____________ (1) Geographic area data is based upon the location of the subsidiary reporting the revenue. (2) For the year ended December 31, 2017, Equipment sale revenues excluded $44 of equipment-related training revenue, which was classified as Services under previous revenue guidance - refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition. (3) Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through our channel partners as Xerox Partner Print Services (XPPS). (4) Primarily includes revenues from our Managed Services offerings (formerly our Managed Documents Services arrangements). Also includes revenues from embedded operating leases, which were not significant. (5) Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Change in Presentation, for additional information. (6) Primarily reflects sales through bundled lease arrangements. (7) Primarily reflects sales through our two-tier distribution channels. |
Capitalized contract cost | Year Ended December 31, 2019 2018 Incremental direct costs of obtaining a contract $ 78 $ 84 Amortization of incremental direct costs 88 95 |
Segment and Geographic Area R_2
Segment and Geographic Area Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Revenue and long-lived assets by geography | Geographic Area Data Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is as follows: Revenues Long-Lived Assets (1) Year Ended December 31, As of December 31, 2019 2018 2017 2019 2018 United States $ 5,429 $ 5,610 $ 5,790 $ 769 $ 670 Europe 2,326 2,625 2,697 305 277 Other areas 1,311 1,427 1,504 157 147 Total $ 9,066 $ 9,662 $ 9,991 $ 1,231 $ 1,094 _____________ (1) |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of business acquisitions | The following table summarizes the purchase price allocations for our 2019 acquisitions as of the acquisition dates: Weighted-Average Life (Years) Total 2019 Acquisitions Accounts/finance receivables $ 3 Intangible assets: Customer relationships 10 19 Trademarks 5 2 Goodwill 14 Other assets 3 Total Assets acquired 41 Liabilities assumed (3 ) Total Purchase Price $ 38 |
Divestitures (Tables)
Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summarized financial information - discontinued operations | Summarized financial information for our Discontinued Operations is as follows: Year Ended December 31, 2019 2018 2017 Revenue $ 79 $ 168 $ 274 Income from operations (1) $ 176 $ 74 $ 138 Gain on disposal 629 — — Income before income taxes 805 74 138 Income tax expense (1) 95 10 1 Income from discontinued operations, net of tax 710 64 137 Income from discontinued operations attributable to noncontrolling interests, net of tax 5 9 8 Income from discontinued operations, attributable to Xerox, net of tax (1) $ 705 $ 55 $ 129 _____________ (1) 2017 Income from discontinued operations, net of tax, attributable to Xerox includes $3 related to the BPO separation, that includes a loss from operations of $(9) and income tax benefit of $12 with both amounts primarily related to changes in estimated amounts recorded in 2016. The following is a summary of selected financial information for our Discontinued Operations: Year Ended December 31, 2019 2018 2017 Cost and Expenses: Cost of revenues $ 44 $ 110 $ 218 Other expenses 6 9 20 Total Costs and Expenses $ 50 $ 119 $ 238 Selected amounts included in Costs and Expenses: Depreciation and amortization $ — $ — $ 1 Restructuring and related costs — 1 — Other: Equity in net income of FX $ 147 $ 25 $ 102 Net income attributable to noncontrolling interest - XIP 5 9 8 Capital expenditures — — — The following is a summary of the major categories of assets and liabilities of XIP and our Investment in FX as of the date of sale. The balances as of December 31, 2018 are included in Assets and Liabilities of discontinued operations in the Consolidated Balance Sheets: At Date of Sale December 31, 2018 Assets Cash and cash equivalents $ 1 $ 3 Accounts receivable, net 3 6 Inventories 5 7 Other current assets — 3 Total current assets 9 19 Land, building and equipment, net 1 1 Goodwill 9 9 Other long-term assets 1,471 1,342 Total Assets of discontinued operations $ 1,490 $ 1,371 Liabilities Accounts payable $ 8 $ 18 Accrued compensation and benefits costs 1 1 Accrued expenses and other current liabilities 2 2 Total current liabilities 11 21 Other long-term liabilities 1 — Total Liabilities of discontinued operations $ 12 $ 21 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts receivable, net | Accounts receivable, net were as follows: December 31, 2019 2018 Invoiced $ 980 $ 992 Accrued 311 334 Allowance for doubtful accounts (55 ) (56 ) Accounts receivable, net $ 1,236 $ 1,270 |
Accounts receivable sales activity | Accounts receivable sales activity was as follows: Year Ended December 31, 2019 2018 2017 Accounts receivable sales (1) $ 393 $ 405 $ 1,733 Deferred proceeds (2) — — 164 Loss on sale of accounts receivable 3 3 10 _____________ (1) Customers may also enter into structured-payable arrangements that require us to sell our receivables from that customer to a third-party financial institution, which then makes payments to us to settle the customer's receivable. In these instances, we ensure the sale of the receivables are bankruptcy-remote and the payment made to us is without recourse. The activity associated with these arrangements is not reflected in this disclosure, as payments under these arrangements have not been material and these are customer directed arrangements. (2) During 2017, we terminated all accounts receivable sales arrangements in North America and all but one arrangement in Europe, In these terminated arrangements, a portion of the sales proceeds was normally held back by the purchaser and payment was deferred until collection of the related sold receivables. |
Finance Receivables, Net (Table
Finance Receivables, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Finance receivables | Finance receivables, net were as follows: December 31, 2019 2018 Gross receivables $ 3,865 $ 4,003 Unearned income (425 ) (439 ) Subtotal 3,440 3,564 Residual values — — Allowance for doubtful accounts (89 ) (92 ) Finance Receivables, Net 3,351 3,472 Less: Billed portion of finance receivables, net 111 105 Less: Current portion of finance receivables not billed, net 1,158 1,218 Finance Receivables Due After One Year, Net $ 2,082 $ 2,149 |
Schedule of financing receivables, minimum payments | A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as follows: December 31, 2019 2018 12 Months (1) $ 1,490 $ 1,543 24 Months 1,052 1,108 36 Months 728 755 48 Months 422 425 60 Months 158 158 Thereafter 15 14 Total $ 3,865 $ 4,003 _____________ (1) Includes amounts previously billed of $115 and $107 as of December 31, 2019 and 2018 , respectively. |
Allowance for credit losses, financing receivables | The following table is a rollforward of the allowance for doubtful finance receivables as well as the related investment in finance receivables: Allowance for Credit Losses: United States Canada Europe Other (1) Total Balance at December 31, 2017 $ 56 $ 15 $ 35 $ 2 $ 108 Provision 12 3 9 — 24 Charge-offs (17 ) (6 ) (18 ) — (41 ) Recoveries and other (2) 2 — (1 ) — 1 Balance at December 31, 2018 $ 53 $ 12 $ 25 $ 2 $ 92 Provision 20 1 7 — 28 Charge-offs (15 ) (5 ) (14 ) — (34 ) Recoveries and other (2) 1 2 — — 3 Balance at December 31, 2019 $ 59 $ 10 $ 18 $ 2 $ 89 Finance Receivables Collectively Evaluated for Impairment: December 31, 2018 (3)(4) $ 1,946 $ 335 $ 1,239 $ 44 $ 3,564 December 31, 2019 (3) $ 1,922 $ 320 $ 1,155 $ 43 $ 3,440 _____________ (1) Includes developing market countries and smaller units. (2) Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. (3) Total Finance receivables exclude the allowance for credit losses of $89 and $92 at December 31, 2019 and 2018 , respectively. (4) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. |
Credit quality indicators for financing receivables | Details about our finance receivables portfolio based on geography and credit quality indicators are as follows: December 31, 2019 December 31, 2018 Investment Grade Non-investment Grade Sub-standard Total Finance Receivables Investment Grade Non-investment Grade Sub-standard Total Finance Receivables Direct $ 640 $ 331 $ 132 $ 1,103 $ 785 $ 348 $ 104 $ 1,237 Indirect 258 445 116 819 162 400 147 709 Total United States (1) 898 776 248 1,922 947 748 251 1,946 Total Canada 163 91 66 320 162 99 74 335 France 206 137 24 367 232 157 29 418 U.K/Ireland 154 79 8 241 150 87 7 244 Central (2) 176 113 9 298 196 123 8 327 Southern (3) 65 125 15 205 52 136 17 205 Nordic (4) 23 19 2 44 28 15 2 45 Total Europe (5) 624 473 58 1,155 658 518 63 1,239 Other 31 12 — 43 31 13 — 44 Total $ 1,716 $ 1,352 $ 372 $ 3,440 $ 1,798 $ 1,378 $ 388 $ 3,564 _____________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. (5) Prior year amounts have been recasted to conform to the current year presentation. |
Aging of billed finance receivables | The aging of our billed finance receivables is as follows: December 31, 2019 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Direct $ 37 $ 11 $ 8 $ 56 $ 1,047 $ 1,103 $ 57 Indirect 25 5 3 33 786 819 — Total United States 62 16 11 89 1,833 1,922 57 Canada 8 1 1 10 310 320 17 France 3 — — 3 364 367 15 U.K./Ireland 2 — — 2 239 241 — Central (1) 2 — 1 3 295 298 13 Southern (2) 3 1 1 5 200 205 4 Nordic (3) — — — — 44 44 — Total Europe 10 1 2 13 1,142 1,155 32 Other 2 1 — 3 40 43 — Total $ 82 $ 19 $ 14 $ 115 $ 3,325 $ 3,440 $ 106 December 31, 2018 Current 31-90 >90 Days Total Billed Unbilled Total >90 Days Direct $ 38 $ 11 $ 7 $ 56 $ 1,181 $ 1,237 $ 54 Indirect 18 4 2 24 685 709 — Total United States 56 15 9 80 1,866 1,946 54 Canada 7 2 1 10 325 335 22 France 5 — — 5 413 418 14 U.K./Ireland 2 — — 2 242 244 — Central (1) 1 1 1 3 324 327 6 Southern (2) 3 1 1 5 200 205 6 Nordic (3) — — — — 45 45 — Total Europe 11 2 2 15 1,224 1,239 26 Other 2 — — 2 42 44 — Total $ 76 $ 19 $ 12 $ 107 $ 3,457 $ 3,564 $ 102 _____________ (1) As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation. (2) Switzerland, Germany, Austria, Belgium and Holland. (3) Italy, Greece, Spain and Portugal. (4) Sweden, Norway, Denmark and Finland. |
Inventories and Equipment on _2
Inventories and Equipment on Operating Leases, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventories and Equipment on Operating Leases, Net [Abstract] | |
Schedule of inventories by major category | The following is a summary of Inventories by major category: December 31, 2019 2018 Finished goods $ 576 $ 710 Work-in-process 47 49 Raw materials 71 70 Total Inventories $ 694 $ 829 |
Schedule of property subject to or available for operating lease | Equipment on operating leases and the related accumulated depreciation were as follows: December 31, 2019 2018 Equipment on operating leases $ 1,443 $ 1,519 Accumulated depreciation (1,079 ) (1,077 ) Equipment on operating leases, net $ 364 $ 442 |
Schedule of future minimum rental payments for operating leases | Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows: December 31, 2019 $ 114 2020 88 2021 64 2022 50 2023 36 Thereafter 27 Total Operating lease commitments $ 379 December 31, 2019 2018 12 months $ 226 $ 260 24 months 139 178 36 months 84 111 48 months 39 61 60 months 12 21 Thereafter 2 2 Total $ 502 $ 633 |
Land, Buildings, Equipment an_2
Land, Buildings, Equipment and Software, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Land, Buildings and Equipment, Net [Abstract] | |
Land, buildings and equipment, net | Land, buildings and equipment, net were as follows: December 31, Estimated Useful Lives (Years) 2019 2018 Land $ 12 $ 12 Building and building equipment 25 to 50 794 793 Leasehold improvements Varies 135 178 Plant machinery 5 to 12 1,124 1,143 Office furniture and equipment 3 to 15 565 607 Other 4 to 20 45 45 Construction in progress 23 26 Subtotal 2,698 2,804 Accumulated depreciation (2,272 ) (2,306 ) Land, buildings and equipment, net $ 426 $ 498 |
Land, buildings and equipment depreciation expense | Depreciation expense was $101 , $148 and $136 for the three years ended December 31, 2019 , 2018 and 2017 , respectively. |
Schedule of future minimum rental payments for operating leases | Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows: December 31, 2019 $ 114 2020 88 2021 64 2022 50 2023 36 Thereafter 27 Total Operating lease commitments $ 379 December 31, 2019 2018 12 months $ 226 $ 260 24 months 139 178 36 months 84 111 48 months 39 61 60 months 12 21 Thereafter 2 2 Total $ 502 $ 633 |
Investment in Affiliates, at _2
Investment in Affiliates, at Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in affiliates, at equity | Investments in corporate joint ventures and other companies in which we generally have a 20% to 50% ownership interest were as follows: December 31, 2019 2018 Fuji Xerox (1) $ — $ 1,360 Other (2) 46 43 Investments in affiliates, at equity $ 46 $ 1,403 _____________ (1) Balance at December 31, 2018 reported in Other long-term assets of discontinued operations. (2) Balance at December 31, 2019 and 2018, respectively, reported in Other long-term assets. |
Total equity in net income of unconsolidated affiliates | Our equity in net income of our unconsolidated affiliates was as follows: Year Ended December 31, 2019 2018 2017 Fuji Xerox (1) $ 147 $ 25 $ 102 Other 8 8 13 Total Equity in net income of unconsolidated affiliates $ 155 $ 33 $ 115 _____________ (1) Equity in net income for Fuji Xerox is reported in Income from discontinued operations, net of tax for all years. The equity in net income for Fuji Xerox in 2019 is through the date of sale. |
Summarized financial information of equity investment [Table Text Block] | Summarized financial information for Fuji Xerox is as follows: Through Date of Sale Year Ended December 31, 2019 2018 2017 Summary of Operations Revenues $ 7,667 $ 9,161 $ 9,638 Costs and expenses 6,814 8,880 9,072 Income before income taxes 853 281 566 Income tax expense 258 160 144 Net Income 595 121 422 Less: Net income - noncontrolling interests 3 2 5 Net Income - Fuji Xerox $ 592 $ 119 $ 417 Balance Sheet At Date of Sale December 31, 2018 December 31, 2017 Assets Current assets $ 4,876 $ 4,179 $ 4,315 Long-term assets 3,964 4,034 4,488 Total Assets $ 8,840 $ 8,213 $ 8,803 Liabilities and Equity Short-term debt $ 49 $ 130 $ 428 Other current liabilities 1,932 1,827 2,079 Long-term debt 16 24 76 Other long-term liabilities 514 395 369 Noncontrolling interests 18 30 33 Fuji Xerox shareholders' equity 6,311 5,807 5,818 Total Liabilities and Equity $ 8,840 $ 8,213 $ 8,803 |
Exchange rates used to translate results of equity investments in affiliates | Yen/U.S. Dollar exchange rates used to translate are as follows: Financial Statement Exchange Basis 2019 2018 2017 Summary of Operations Weighted average rate 109.03 110.28 112.14 Balance Sheet Year-end rate 108.83 110.26 112.87 |
Transactions with Fuji Xerox | Transactions with Fuji Xerox were as follows: Year Ended December 31, 2019 2018 2017 Royalty revenue earned $ 99 $ 96 $ 103 Inventory purchases from Fuji Xerox 1,337 1,501 1,585 Inventory sales to Fuji Xerox 33 43 58 R&D payments received from Fuji Xerox — 1 1 R&D payments paid to Fuji Xerox 4 8 14 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Goodwill The following table presents the changes in the carrying amount of goodwill: Total Balance at December 31, 2016 (1) $ 3,778 Foreign currency translation 105 Acquisitions: MT Business 33 Other 11 Divestiture (2) (6 ) Balance at December 31, 2017 $ 3,921 Foreign currency translation (63 ) Balance at December 31, 2018 $ 3,858 Foreign currency translation 28 Acquisitions 14 Balance at December 31, 2019 $ 3,900 _____________ (1) Balance at December 31, 2016 has been reduced by $9 to reflect the allocation of goodwill to the sale of XIP, which is accounted for as a discontinued operation. Refer to Note 7 - Divestitures for additional information regarding this divestiture. (2) Relates to the sale of Xerox Research Centre Europe in Grenoble, France to Naver. Refer to Note 7 - Divestitures for additional information regarding this divestiture. |
Schedule of intangible assets, net, by major class | Intangible Assets, Net Net intangible assets were $199 at December 31, 2019 . Intangible assets were comprised of the following: December 31, 2019 December 31, 2018 Weighted Average Amortization Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount Customer relationships 10 years $ 140 $ 86 $ 54 $ 317 $ 263 $ 54 Distribution network 25 years 123 99 24 123 93 30 Trademarks 20 years 258 146 112 260 133 127 Technology and non-compete 12 years 18 9 9 15 6 9 Total Intangible Assets $ 539 $ 340 $ 199 $ 715 $ 495 $ 220 |
Restructuring Programs (Tables)
Restructuring Programs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring program activity | A summary of our restructuring program activity for the three years ended December 31, 2019 , 2018 and 2017 is as follows: Severance and Related Costs Other Contractual Termination Costs (2) Asset Impairments (3)(4) Total Balance at December 31, 2016 $ 104 $ 23 $ — $ 127 Restructuring provision 221 4 7 232 Reversals of prior charges (29 ) (6 ) — (35 ) Net Current Period Charges (1) 192 (2 ) 7 197 Charges against reserve and currency (188 ) (20 ) (7 ) (215 ) Balance at December 31, 2017 $ 108 $ 1 $ — $ 109 Restructuring provision 175 14 — 189 Reversals of prior charges (33 ) — — (33 ) Net Current Period Charges (1) 142 14 — 156 Charges against reserve and currency (156 ) (14 ) — (170 ) Balance at December 31, 2018 $ 94 $ 1 $ — $ 95 Restructuring provision 81 19 61 161 Reversals of prior charges (24 ) (5 ) (5 ) (34 ) Net Current Period Charges (1) 57 14 56 127 Charges against reserve and currency (85 ) (11 ) (56 ) (152 ) Balance at December 31, 2019 $ 66 $ 4 $ — $ 70 _____________ (1) Represents net amount recognized within the Consolidated Statements of Income for the years shown for restructuring and asset impairment charges. (2) Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs. (3) Charges associated with asset impairments represent the write-down of the related assets to their new cost basis and are recorded concurrently with the recognition of the provision. (4) 2019 amounts primarily relate to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $39 for leased right-of-use assets and $22 for owned assets and are net of any potential sublease income or other recovery amounts . |
Reconciliation to the consolidated statements of cash flows | The following table summarizes the reconciliation to the Consolidated Statements of Cash Flows: Year Ended December 31, 2019 2018 2017 Charges against reserve and currency $ (152 ) $ (170 ) $ (215 ) Asset impairments 56 — 7 Effects of foreign currency and other non-cash items 3 1 (12 ) Restructuring Cash Payments $ (93 ) $ (169 ) $ (220 ) |
Restructuring and related costs | In connection with our restructuring programs, we also incurred certain related costs as follows: Year Ended December 31, 2019 Retention related severance/bonuses (1) $ 39 Contractual severance costs (2) 43 Consulting and other costs (3) 20 $ 102 _____________ (1) Includes retention related severance and bonuses for employees expected to continue working beyond their minimum retention period before termination. (2) Reflects estimated severance and other related costs we are contractually required to pay on employees transferred (approximately 2,200 ) as part of the shared service arrangement entered into with HCL Technologies. (3) Represents professional support services associated with our business transformation initiatives. |
Supplementary Financial Infor_2
Supplementary Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Financial Information [Abstract] | |
Other assets and liabilities | The components of Other assets and liabilities were as follows: December 31, 2019 2018 Other Current Assets Income taxes receivable $ 27 $ 14 Royalties, license fees and software maintenance 25 20 Restricted cash — 1 Prepaid expenses 29 31 Derivative instruments 2 15 Advances and deposits 30 28 Other 88 82 Total Other Current Assets $ 201 $ 191 Other Long-term Assets Income taxes receivable $ 9 $ 8 Prepaid pension costs 451 281 Derivative instruments 1 — Internal use software, net 122 154 Restricted cash 55 63 Debt issuance costs, net 3 4 Customer contract costs, net 176 184 Operating lease right-of-use asset (1) 319 — Deferred compensation plan investments 19 16 Investments in affiliates, at equity (2) 46 43 Other 137 149 Total Other Long-term Assets $ 1,338 $ 902 Accrued Expenses and Other Current Liabilities Income taxes payable $ 7 $ 33 Other taxes payable 79 77 Operating lease obligation (1) 87 — Financing lease obligation (1) 2 — Interest payable 38 41 Restructuring reserves 70 93 Restructuring related costs 37 — Derivative instruments 8 1 Product warranties 6 5 Dividends payable 66 69 Distributor and reseller rebates/commissions 167 158 Unearned income and other revenue deferrals 158 155 Other 259 216 Total Accrued Expenses and Other Current Liabilities $ 984 $ 848 Other Long-term Liabilities Deferred taxes $ 37 $ 51 Income taxes payable 64 18 Operating lease obligation (1) 260 — Finance lease obligation (1) 5 — Environmental reserves 9 9 Restructuring reserves — 2 Other 137 189 Total Other Long-term Liabilities $ 512 $ 269 _____________ (1) 2019 amounts relate to the adoption of ASC 842, Leases effective January 1, 2019. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 2 - Adoption of New Leasing Standard - Lessee for additional information. (2) Refer to Note 12 - Investments in Affiliates, at Equity for additional information. |
Schedule of restricted cash | Restricted cash amounts were as follows: December 31, 2019 2018 Cash and cash equivalents $ 2,740 $ 1,081 Restricted cash Litigation deposits in Brazil 55 61 Other restricted cash — 3 Total Restricted Cash 55 64 Cash, cash equivalents and restricted cash of continuing operations 2,795 1,145 Cash, cash equivalents and restricted cash of discontinued operations — 3 Cash, cash equivalents and restricted cash $ 2,795 $ 1,148 |
Restricted cash balance sheet location | Restricted cash was reported in the Consolidated Balance Sheets as follows: December 31, 2019 2018 Other current assets $ — $ 1 Other long-term assets 55 63 Total Restricted cash $ 55 $ 64 |
Pension and other benefit liabilities | Pension and Other Benefit Liabilities December 31, 2019 2018 Pension liabilities (1) $ 1,616 $ 1,386 Accrued compensation liabilities 69 73 Deferred compensation liabilities (2) 22 23 Pension and other benefit liabilities $ 1,707 $ 1,482 __________________________ (1) Refer to Note 19 - Employee Benefit Plans for additional information regarding pension liabilities. (2) As of December 31, 2019 and 2018 , includes amounts measured at fair value on a recurring basis of $18 and $16 , respectively, and amounts for executive deferred compensation of $4 and $7 , respectively. Refer to Note 18 - Fair Value of Financial Assets and Liabilities for additional information regarding deferred compensation liabilities. |
Summarized cash flow information | Summarized cash flow information is as follows: Year Ended December 31, 2019 2018 2017 Provision for receivables $ 49 $ 40 $ 46 Provision for inventory 24 30 27 Provision for product warranty 12 14 15 Depreciation of buildings and equipment 101 148 136 Depreciation and obsolescence of equipment on operating leases 225 249 265 Amortization of internal use software 59 81 65 Amortization of product software — — 4 Amortization of acquired intangible assets 45 48 53 Amortization of customer contract costs (1) 93 100 4 Cost of additions to land, buildings and equipment 41 55 69 Cost of additions to internal use software 24 35 36 Common stock dividends - Xerox Holdings 229 255 274 Preferred stock dividends - Xerox Holdings 14 14 17 Payments to noncontrolling interests 14 17 18 Repurchases related to stock-based compensation - Xerox Holdings 28 9 15 __________________________ (1) Amortization of customer contract costs for the years ended December 31, 2019 and 2018 is reported in (Increase) decrease in other current and long-term assets on the Consolidated Statements of Cash Flows. Refer to Note 4 - Revenue - Contract Costs for additional information. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of short-term borrowings | Short-term borrowings were as follows: December 31, 2019 2018 Current maturities of long-term debt $ 1,049 $ 961 Short-term debt and current portion of long-term debt $ 1,049 $ 961 |
Schedule of long-term debt | Long-term debt was as follows: December 31, Stated Rate Weighted Average Interest Rates at December 31, 2019 (1) 2019 2018 Xerox Senior Notes due 2019 $ — $ 406 Senior Notes due 2019 — 554 Senior Notes due 2020 2.80 % 2.50 % 313 313 Senior Notes due 2020 3.50 % 3.47 % 362 362 Senior Notes due 2020 2.75 % 2.67 % 376 375 Senior Notes due 2021 4.50 % 4.54 % 1,062 1,062 Senior Notes due 2022 4.07 % 4.07 % 300 300 Senior Notes due 2023 (2) 4.13 % 3.68 % 1,000 1,000 Senior Notes due 2024 3.80 % 3.84 % 300 300 Senior Notes due 2035 4.80 % 4.84 % 250 250 Senior Notes due 2039 6.75 % 6.78 % 350 350 Subtotal - Notes $ 4,313 $ 5,272 Capital lease obligations (3) $ — $ 9 Principal debt balance $ 4,313 $ 5,281 Unamortized discount (16 ) (25 ) Debt issuance costs (17 ) (25 ) Fair value adjustments (4) Terminated swaps 1 2 Current swaps 1 (3 ) Less: current maturities (1,049 ) (961 ) Total Long-term Debt $ 3,233 $ 4,269 _____________ (1) Represents the weighted average effective interest rate, which includes the effect of discounts and premiums on issued debt. (2) As a result of the downgrade of our debt ratings in December 2018, the original coupon rate of 3.625% increased by 0.50% to 4.125% effective March 15, 2019. (3) As a result of the adoption of ASC 842, Leases effective January 1, 2019, capital lease obligations are reported in Other current and non-current liabilities. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, Note 2 - Adoption of New Leasing Standard - Lessee and Note 15 - Supplementary Financial Information for additional information. (4) Fair value adjustments include the following: (i) fair value adjustments to debt associated with terminated interest rate swaps, which are being amortized to interest expense over the remaining term of the related notes; and (ii) changes in fair value of hedged debt obligations attributable to movements in benchmark interest rates. Hedge accounting requires hedged debt instruments to be reported inclusive of any fair value adjustment. |
Schedule of maturities of long-term debt | Scheduled principal payments due on our long-term debt for the next five years and thereafter are as follows: 2020 (1) 2021 2022 2023 2024 Thereafter Total $ 1,051 $ 1,062 $ 300 $ 1,000 $ 300 $ 600 $ 4,313 _____________ (1) Long-term debt maturities for 2020 are $0 , $313 , $738 and $0 for the first, second, third and fourth quarters, respectively. |
Interest income and interest expense disclosure | Interest expense and interest income was as follows: Year Ended December 31, 2019 2018 2017 Interest expense (1) $ 236 $ 244 $ 252 Interest income (2) 260 283 302 _____________ (1) Includes Equipment financing interest expense, as well as non-financing interest expense included in Other expenses, net in the Consolidated Statements of Income. (2) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value hedges | The following is a summary of our fair value hedges at December 31, 2019 : Debt Instrument Year First Designated Notional Amount Net Fair Value Weighted Average Interest Rate Paid Interest Rate Received Basis Maturity Senior Note 2021 2014 $ 200 $ 1 3.35 % 4.50 % Libor 2021 |
Schedule of foreign exchange contracts gross notional values | The following is a summary of the primary hedging positions and corresponding fair values as of December 31, 2019 : Currencies Hedged (Buy/Sell) Gross Notional Value Fair Value Asset (1) Japanese Yen/U.S. Dollar $ 369 $ (2 ) Japanese Yen/Euro 264 (3 ) U.S. Dollar/Euro 122 — Euro/U.S. Dollar 71 — Euro/U.K. Pound Sterling 64 — U.S. Dollar/Canadian Dollar 50 (1 ) Euro/Danish Krone 29 — U.K. Pound Sterling/Euro 27 — U.S. Dollar/Russian Ruble 22 (1 ) U.S. Dollar/Japanese Yen 14 — Euro/Swiss Franc 12 — U.S. Dollar/Israeli Shekel 9 — All Other 38 1 Total Foreign exchange hedging $ 1,091 $ (6 ) ____________ (1) Represents the net receivable (payable) amount included in the Consolidated Balance Sheet at December 31, 2019 . |
Schedule of derivative instruments fair value | The following table provides a summary of the fair value amounts of our derivative instruments: December 31, Designation of Derivatives Balance Sheet Location 2019 2018 Derivatives Designated as Hedging Instruments Foreign exchange contracts – forwards Other current assets $ 1 $ 7 Accrued expensed and other current liabilities (5 ) — Foreign currency options Other current assets — 1 Interest rate swaps Other long-term assets 1 — Other long-term liabilities — (3 ) Net Designated Derivative (Liability) Asset $ (3 ) $ 5 Derivatives NOT Designated as Hedging Instruments Foreign exchange contracts – forwards Other current assets $ 1 $ 7 Accrued expensed and other current liabilities (3 ) (1 ) Net Undesignated Derivative (Liability) Asset $ (2 ) $ 6 Summary of Derivatives Total Derivative Assets $ 3 $ 15 Total Derivative Liabilities (8 ) (4 ) Net Derivative (Liability) Asset $ (5 ) $ 11 |
Schedule of fair value hedges gains (losses) | The following tables provide a summary of gains (losses) on derivative instruments: Year Ended December 31, Derivatives in Fair Value Relationships Location of Gain (Loss) Recognized in Income Derivative Gain (Loss) Recognized in Income Hedged Item (Loss) Gain Recognized in Income 2019 2018 2017 2019 2018 2017 Interest rate contracts Interest expense $ 4 $ (3 ) $ (3 ) $ (4 ) $ 3 $ 3 |
Schedule of cash flow hedges gain (loss) | Year Ended December 31, Derivatives in Cash Flow Hedging Relationships Derivative Gain (Loss) Recognized in OCI (Effective Portion) Location of Derivative Gain (Loss) Reclassified from AOCI into Income (Effective Portion) Gain (Loss) Reclassified from AOCI to Income (Effective Portion) 2019 2018 2017 2019 2018 2017 Foreign exchange contracts – forwards/options $ 2 $ 9 $ (28 ) Cost of sales $ 9 $ (14 ) $ (35 ) |
Schedule of derivatives not designated as hedging instruments gains (losses) | The following table provides a summary of gains (losses) on non-designated derivative instruments: Year Ended December 31, Derivatives NOT Designated as Hedging Instruments Location of Derivative Gain (Loss) 2019 2018 2017 Foreign exchange contracts – forwards Other expense – Currency (losses) gains, net $ (6 ) $ 21 $ (44 ) |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial assets and liabilities | The following table represents assets and liabilities fair value measured on a recurring basis. The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs. As of December 31, 2019 2018 Assets Foreign exchange contracts - forwards $ 2 $ 14 Foreign currency options — 1 Interest rate swaps 1 — Deferred compensation investments in mutual funds 19 16 Total $ 22 $ 31 Liabilities Foreign exchange contracts - forwards $ 8 $ 1 Interest rate swaps — 3 Deferred compensation plan liabilities 18 16 Total $ 26 $ 20 |
Schedule of estimated fair values of financial assets and liabilities not measured at fair value on a recurring basis | The estimated fair values of our other financial assets and liabilities were as follows: December 31, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 2,740 $ 2,740 $ 1,081 $ 1,081 Accounts receivable, net 1,236 1,236 1,270 1,270 Short-term debt and current portion of long-term debt 1,049 1,054 961 966 Long-term debt 3,233 3,331 4,269 3,922 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Defined Benefit Plan [Abstract] | |
Schedule of net funded status | Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health 2019 2018 2019 2018 2019 2018 Change in Benefit Obligation: Benefit obligation, January 1 $ 3,234 $ 4,180 $ 6,007 $ 6,703 $ 385 $ 723 Service cost 2 2 22 27 2 4 Interest cost 218 63 153 149 15 23 Plan participants' contributions — — 3 4 10 3 Actuarial loss (gain) 564 (288 ) 472 (293 ) 8 (63 ) Currency exchange rate changes — — 114 (339 ) 5 (11 ) Plan Amendments/Curtailments — — (2 ) 41 — (234 ) Benefits paid/settlements (420 ) (723 ) (270 ) (281 ) (40 ) (60 ) Other — — (7 ) (4 ) — — Benefit Obligation, December 31 $ 3,598 $ 3,234 $ 6,492 $ 6,007 $ 385 $ 385 Change in Plan Assets: Fair value of plan assets, January 1 $ 2,358 $ 3,224 $ 5,729 $ 6,308 $ — $ — Actual return on plan assets 529 (170 ) 680 (85 ) — — Employer contributions 26 27 115 117 30 57 Plan participants' contributions — — 3 4 10 3 Currency exchange rate changes — — 135 (329 ) — — Benefits paid/settlements (420 ) (723 ) (270 ) (281 ) (40 ) (60 ) Other — — (7 ) (5 ) — — Fair Value of Plan Assets, December 31 $ 2,493 $ 2,358 $ 6,385 $ 5,729 $ — $ — Net Funded Status at December 31 (1) $ (1,105 ) $ (876 ) $ (107 ) $ (278 ) $ (385 ) $ (385 ) Amounts Recognized in the Consolidated Balance Sheets: Other long-term assets $ — $ — $ 451 $ 281 $ — $ — Accrued compensation and benefit costs (25 ) (25 ) (22 ) (24 ) (33 ) (35 ) Pension and other benefit liabilities (1,080 ) (851 ) (536 ) (535 ) — — Post-retirement medical benefits — — — — (352 ) (350 ) Net Amounts Recognized $ (1,105 ) $ (876 ) $ (107 ) $ (278 ) $ (385 ) $ (385 ) Accumulated Benefit Obligation $ 3,598 $ 3,234 $ 6,326 $ 5,847 _____________ (1) Includes under-funded and unfunded plans. |
Schedule of amounts in accumulated other comprehensive loss to be recognized over next fiscal year | Benefit plans pre-tax amounts recognized in AOCL at December 31: Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health 2019 2018 2019 2018 2019 2018 Net actuarial loss (gain) $ 1,059 $ 933 $ 1,462 $ 1,457 $ (29 ) $ (42 ) Prior service (credit) cost (3 ) (5 ) 22 19 (164 ) (240 ) Total Pre-tax loss (gain) $ 1,056 $ 928 $ 1,484 $ 1,476 $ (193 ) $ (282 ) |
Schedule of accumulated benefit obligations in excess of fair value of plan assets | Aggregate information for pension plans with an Accumulated benefit obligation in excess of plan assets is presented below. Information for Retiree Health plans with an accumulated post-retirement benefit obligation in excess of plan assets has been disclosed in the preceding table on Benefit obligations and Net funded status as all Retiree Health plans are unfunded. December 31, 2019 December 31, 2018 Accumulated Benefit Obligation Fair Value of Plan Assets Accumulated Benefit Obligation Fair Value of Plan Assets Underfunded Plans: U.S. $ 3,261 $ 2,493 $ 2,918 $ 2,358 Non U.S. 767 697 713 624 Unfunded Plans: U.S. $ 337 $ — $ 316 $ — Non U.S. 469 — 446 — Total Underfunded and Unfunded Plans: U.S. $ 3,598 $ 2,493 $ 3,234 $ 2,358 Non U.S. 1,236 697 1,159 624 Total $ 4,834 $ 3,190 $ 4,393 $ 2,982 Aggregate information for pension plans with a benefit obligation in excess of plan assets is presented below: December 31, 2019 December 31, 2018 Benefit Obligation Fair Value of Plan Assets Benefit Obligation Fair Value of Plan Assets Underfunded Plans: U.S. $ 3,261 $ 2,493 $ 2,918 $ 2,358 Non U.S. 780 697 888 782 Unfunded Plans: U.S. $ 337 $ — $ 316 $ — Non U.S. 479 — 456 — Total Underfunded and Unfunded Plans: U.S. $ 3,598 $ 2,493 $ 3,234 $ 2,358 Non U.S. 1,259 697 1,344 782 Total $ 4,857 $ 3,190 $ 4,578 $ 3,140 |
Schedule of defined benefit pension assets and obligations by geography | Our pension plan assets and benefit obligations at December 31, 2019 were as follows: Fair Value of Pension Plan Assets Pension Benefit Obligations Net Funded Status U.S. funded $ 2,493 $ 3,261 $ (768 ) U.S. unfunded — 337 (337 ) Total U.S. 2,493 3,598 (1,105 ) U.K. 4,169 3,798 371 Netherlands 1,083 1,101 (18 ) Canada 721 738 (17 ) Germany — 367 (367 ) Other 412 488 (76 ) Total $ 8,878 $ 10,090 $ (1,212 ) |
Schedule of components of net periodic benefit cost and other changes in plan assets and benefit obligations | The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows: Year Ended December 31, Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health 2019 2018 2017 2019 2018 2017 2019 2018 2017 Components of Net Periodic Benefit Costs: Service cost $ 2 $ 2 $ 2 $ 22 $ 27 $ 29 $ 2 $ 4 $ 5 Interest cost (1) 218 63 226 153 149 158 15 23 28 Expected return on plan assets (2) (210 ) (67 ) (227 ) (233 ) (244 ) (221 ) — — — Recognized net actuarial loss (gain) 24 22 21 43 56 79 (5 ) — 1 Amortization of prior service credit (2 ) (2 ) (2 ) (2 ) (4 ) (4 ) (77 ) (19 ) (4 ) Recognized settlement loss 93 173 133 1 1 2 — — — Recognized curtailment gain — — — — (1 ) (2 ) — — — Defined Benefit Plans 125 191 153 (16 ) (16 ) 41 (65 ) 8 30 Defined contribution plans 26 37 38 23 29 29 n/a n/a n/a Net Periodic Benefit Cost (Credit) 151 228 191 7 13 70 (65 ) 8 30 Other changes in plan assets and benefit obligations recognized in Other Comprehensive (Loss) Income: Net actuarial loss (gain) (3) 243 (50 ) 238 24 33 (273 ) 8 (63 ) (16 ) Prior service cost (credit) — — — — 41 (1 ) — (234 ) — Amortization of net actuarial (loss) gain (117 ) (195 ) (154 ) (44 ) (57 ) (81 ) 5 — (1 ) Amortization of net prior service credit 2 2 2 2 4 4 77 19 4 Curtailment gain — — — — 1 — — — — Total Recognized in Other Comprehensive (Loss) Income (4) 128 (243 ) 86 (18 ) 22 (351 ) 90 (278 ) (13 ) Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income $ 279 $ (15 ) $ 277 $ (11 ) $ 35 $ (281 ) $ 25 $ (270 ) $ 17 _____________ (1) Interest cost for Pension Benefits includes interest expense on non-TRA obligations of $243 , $258 and $257 and interest expense (income) directly allocated to TRA participant accounts of $128 , $(46) and $127 for the years ended December 31, 2019 , 2018 and 2017 , respectively. (2) Expected return on plan assets includes expected investment income on non-TRA assets of $315 , $357 and $321 and actual investment (loss) income on TRA assets of $128 , $(46) and $127 for the years ended December 31, 2019 , 2018 and 2017 , respectively. (3) The non-U.S. plans Net actuarial (gain) loss for 2018 reflects an out-of-period adjustment in third quarter 2018 of $(53) to correct an overstated benefit obligation for our U.K. Final Salary Pension Plan at December 31, 2017. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information regarding this adjustment. (4) Amounts represent the pre-tax effect included in Other comprehensive (loss) income. Refer to Note 25 - Other Comprehensive (Loss) Income for the related tax effects and the net of tax amounts. |
Defined benefit plan assets measured at fair value, observable and unobservable inputs | The following tables present the defined benefit plans assets measured at fair value and the basis for that measurement. December 31, 2019 U.S. Plans Non-U.S. Plans Asset Class Level 1 Level 2 Level 3 Assets measured at NAV (1) Total Level 1 Level 2 Level 3 Assets measured at NAV (1) Total Cash and cash equivalents $ 9 $ — $ — $ — $ 9 $ 421 $ — $ — $ — $ 421 Equity Securities: U.S. 182 — — 39 221 132 52 — — 184 International 193 — — 191 384 462 302 — 118 882 Fixed Income Securities: U.S. treasury securities — 316 — — 316 — 47 — — 47 Debt security issued by government agency — 67 — — 67 — 1,825 — — 1,825 Corporate bonds — 1,119 — — 1,119 — 841 — — 841 Derivatives — 45 — — 45 — 186 — — 186 Real estate — — 5 10 15 — — 219 116 335 Private equity/venture capital — — — 199 199 — — 5 1,527 1,532 Guaranteed insurance contracts — — — — — — — 90 — 90 Other (2)(3) (36 ) — — 154 118 11 31 — — 42 Total Fair Value of Plan Assets $ 348 $ 1,547 $ 5 $ 593 $ 2,493 $ 1,026 $ 3,284 $ 314 $ 1,761 $ 6,385 _____________ (1) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. (2) Other NAV includes mutual funds of $76 (measured at NAV) which are invested approximately 75% in fixed income securities and approximately 25% in equity securities. (3) Other Level 1 includes net non-financial (liabilities) assets of $(36) U.S. and $11 Non-U.S., respectively, such as due to/from broker, interest receivables and accrued expenses. December 31, 2018 U.S. Plans Non-U.S. Plans Asset Class Level 1 Level 2 Level 3 Assets measured at NAV (1) Total Level 1 Level 2 Level 3 Assets measured at NAV (1) Total Cash and cash equivalents $ 1 $ — $ — $ — $ 1 $ 370 $ — $ — $ — $ 370 Equity Securities: U.S. 82 — — 35 117 103 42 — — 145 International 97 — — 52 149 359 111 — 112 582 Fixed Income Securities: U.S. treasury securities — 248 — — 248 — 57 — — 57 Debt security issued by government agency — 81 — — 81 — 1,861 — — 1,861 Corporate bonds — 1,363 — — 1,363 — 736 — — 736 Derivatives — (26 ) — — (26 ) — 99 — — 99 Real estate 19 — — 9 28 — — 210 157 367 Private equity/venture capital — — — 353 353 — — 6 1,386 1,392 Guaranteed insurance contracts — — — — — — — 92 — 92 Other (2) 12 — — 32 44 5 23 — — 28 Total Fair Value of Plan Assets $ 211 $ 1,666 $ — $ 481 $ 2,358 $ 837 $ 2,929 $ 308 $ 1,655 $ 5,729 _____________ (1) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. (2) Other Level 1 includes net non-financial (liabilities) assets of $12 U.S. and $5 Non-U.S., respectively, such as due to/from broker, interest receivables and accrued expenses. |
Schedule of fair value, assets measured on recurring basis, unobservable input reconciliation | The following tables represents a roll-forward of the defined benefit plans assets measured at fair value using significant unobservable inputs (Level 3 assets): U.S. Non-U.S. Real Estate Real Estate Private Equity/Venture Capital Guaranteed Insurance Contracts Total Balance at December 31, 2017 $ — $ 137 $ 7 $ 100 $ 244 Purchases — 22 — 1 23 Sales — (1 ) — (6 ) (7 ) Realized losses (4 ) — — — — Unrealized gains (losses) 4 62 (4 ) — 58 Currency translation — (10 ) 3 (3 ) (10 ) Balance at December 31, 2018 $ — $ 210 $ 6 $ 92 $ 308 Purchases 5 — — 2 2 Sales — — (5 ) (4 ) (9 ) Unrealized gains — 9 4 2 15 Currency translation — — — (2 ) (2 ) Balance at December 31, 2019 $ 5 $ 219 $ 5 $ 90 $ 314 |
Schedule of allocation of plan assets | The target asset allocations for our worldwide defined benefit pension plans were: 2019 2018 U.S. Non-U.S. U.S. Non-U.S. Equity investments 23% 14% 12% 13% Fixed income investments 61% 46% 73% 46% Real estate 6% 5% 3% 6% Private equity/venture capital 8% 24% 6% 24% Other 2% 11% 6% 11% Total Investment Strategy 100% 100% 100% 100% |
Defined benefit and retiree health pension plans, actual and expected cash contributions | The following table summarizes cash contributions to our defined benefit pension plans and retiree health benefit plans. Year Ended December 31, 2019 Estimated 2020 U.S. Plans $ 26 $ 25 Non-U.S. Plans 115 110 Total $ 141 $ 135 Retiree Health $ 30 $ 35 The 2019 U.S. pension plan contributions did no t include any contributions for our domestic tax-qualified defined benefit plans because none were required to meet the minimum funding requirements. There are no contributions required in 2020 for our U.S. tax-qualified defined benefit plans to meet the minimum funding requirements. |
Schedule of expected benefit payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following years: Pension Benefits U.S. Non-U.S. Total Retiree Health 2020 $ 480 $ 266 $ 746 $ 35 2021 262 272 534 32 2022 269 277 546 31 2023 272 283 555 29 2024 264 289 553 28 Years 2025-2029 1,198 1,526 2,724 118 |
Schedule of assumptions used | Weighted-average assumptions used to determine benefit obligations at the plan measurement dates: Pension Benefits 2019 2018 2017 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Discount rate 3.1 % 1.8 % 4.2 % 2.6 % 3.6 % 2.3 % Rate of compensation increase 0.2 % 2.6 % 0.2 % 2.6 % 0.2 % 2.6 % Interest crediting rate 2.8 % 1.5 % 2.8 % 1.5 % 2.8 % 1.5 % Retiree Health 2019 2018 2017 Discount rate 3.0 % 4.1 % 3.5 % Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31: Pension Benefits 2020 2019 2018 2017 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Discount rate 3.1 % 1.8 % 4.2 % 2.6 % 3.6 % 2.3 % 4.0 % 2.5 % Expected return on plan assets 6.0 % 3.3 % 6.0 % 4.0 % 5.8 % 3.8 % 7.0 % 4.1 % Rate of compensation increase 0.2 % 2.6 % 0.2 % 2.6 % 0.2 % 2.6 % 0.2 % 2.6 % Interest crediting rate 2.8 % 1.5 % 2.8 % 1.5 % 2.8 % 1.5 % 2.8 % 1.5 % Retiree Health 2020 2019 2018 2017 Discount rate 3.0 % 4.1 % 3.5 % 3.9 % _____________ |
Schedule of health care cost trend rates | Assumed health care cost trend rates were as follows: December 31, 2019 2018 Health care cost trend rate assumed for next year 6.0 % 6.3 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.3 % 4.7 % Year that the rate reaches the ultimate trend rate 2026 2025 |
Income and Other Taxes (Tables)
Income and Other Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income tax, domestic and foreign | Income before income taxes and equity income (pre-tax income) from continuing operations was as follows: Year Ended December 31, 2019 2018 2017 Domestic income $ 679 $ 331 $ 354 Foreign income 143 218 171 Income before Income Taxes and Equity Income $ 822 $ 549 $ 525 |
Schedule of components of income tax expense (benefit) | We recorded the following charges (credits) to Income tax expense associated with the Tax Act: Year Ended December 31, 2019 2018 2017 Total Tax Act Impacts $ (35 ) $ 89 $ 400 $ 454 Year Ended December 31, 2019 2018 2017 Federal Income Taxes Current $ (3 ) $ 37 $ (12 ) Deferred 98 83 411 Foreign Income Taxes Current 43 46 62 Deferred 5 57 (21 ) State Income Taxes Current 15 29 19 Deferred 21 (5 ) 9 Income Tax Expense $ 179 $ 247 $ 468 |
Schedule of effective income tax rate reconciliation | A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate was as follows: Year Ended December 31, 2019 2018 2017 U.S. federal statutory income tax rate 21.0 % 21.0 % 35.0 % Nondeductible expenses 1.3 % 3.7 % 1.3 % Effect of tax law changes (4.6 )% 14.5 % 76.2 % Change in valuation allowance for deferred tax assets 2.0 % 0.6 % 1.1 % State taxes, net of federal benefit 3.5 % 2.3 % 3.6 % Audit and other tax return adjustments 0.6 % (1.8 )% (9.4 )% Tax-exempt income, credits and incentives (2.1 )% (2.2 )% (3.2 )% Foreign rate differential adjusted for U.S. taxation of foreign profits (1) 0.1 % 4.8 % (16.5 )% Other — % 2.1 % 1.0 % Effective Income Tax Rate 21.8 % 45.0 % 89.1 % _____________ (1) The “U.S. taxation of foreign profits” represents the U.S. tax, net of foreign tax credits, associated with actual and deemed repatriations of earnings from our non-U.S. subsidiaries. |
Schedule of allocation of income tax expense (benefit) | Total income tax expense (benefit) was allocated to the following items: Year Ended December 31, 2019 2018 2017 Pre-tax income $ 179 $ 247 $ 468 Discontinued operations (1) 95 10 1 Common shareholders' equity: Changes in defined benefit plans (55 ) 131 63 Cash flow hedges (1 ) 5 5 Translation adjustments 8 (9 ) 1 Retained Earnings — 36 — Total Income Tax Expense $ 226 $ 420 $ 538 _____________ (1) Refer to Note 7 - Divestitures for additional information regarding discontinued operations. |
Schedule of unrecognized tax benefits rollforward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2019 2018 2017 Balance at January 1 $ 108 $ 125 $ 165 Additions related to current year 42 2 1 Additions related to prior years positions 17 3 10 Reductions related to prior years positions (36 ) (13 ) (46 ) Settlements with taxing authorities (1) (1 ) (6 ) (5 ) Reductions related to lapse of statute of limitations (3 ) (3 ) (3 ) Currency — — 3 Balance at December 31 $ 127 $ 108 $ 125 _____________ (1) |
Schedule of deferred tax assets and liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows: December 31, 2019 2018 Deferred Tax Assets Research and development $ 143 $ 252 Post-retirement medical benefits 98 99 Net operating losses 389 389 Operating reserves, accruals and deferrals 95 138 Tax credit carryforwards 239 254 Deferred and share-based compensation 26 32 Pension 298 266 Depreciation 9 90 Operating lease liabilities 347 — Other 62 46 Subtotal 1,706 1,566 Valuation allowance (399 ) (397 ) Total $ 1,307 $ 1,169 Deferred Tax Liabilities Finance lease and installment sales $ 243 $ 291 Intangibles and goodwill 128 129 Unremitted earnings of foreign subsidiaries 39 59 Operating lease ROU assets 319 — Other 17 1 Total $ 746 $ 480 Total Deferred Taxes, Net $ 561 $ 689 Reconciliation to the Consolidated Balance Sheets Deferred tax assets $ 598 $ 740 Deferred tax liabilities (1) (37 ) (51 ) Total Deferred Taxes, Net $ 561 $ 689 _____________ (1) Represents the deferred tax liabilities recorded in Other long-term liabilities - refer to Note 15 - Supplementary Financial Information. |
Contingencies and Litigation (T
Contingencies and Litigation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of loss contingencies by contingency | Below is a summary of our Brazilian tax contingencies: December 31, December 31, Tax contingency - unreserved $ 442 $ 500 Escrow cash deposits 51 58 Surety bonds 135 106 Letters of credit 91 104 Liens on Brazilian assets — — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of treasury stock by class | The following provides cumulative information relating to Xerox's previously authorized share repurchase program from its inception through July 31, 2019, the effective date of the Reorganization (shares in thousands): Authorized share repurchase program $ 2,000 Share repurchase cost $ 1,000 Share repurchase fees $ 1 Number of shares repurchased 35,339 The following provides cumulative information relating to Xerox Holdings' share repurchase program from its inception on July 31, 2019 through December 31, 2019 (shares in thousands): Authorized share repurchase program $ 1,000 Share repurchase cost $ 300 Share repurchase fees $ — Number of shares repurchased 9,097 |
Schedule of common and treasury stock changes | The following table reflects the changes in Common and Treasury stock shares (shares in thousands). The Treasury stock repurchases in the table below include the repurchases under both the prior Xerox authorized share repurchase program and the current Xerox Holdings authorized share repurchase program. Common Stock Shares Treasury Stock Shares Balance at December 31, 2016 253,594 — Stock based compensation plans, net 1,019 — Balance at December 31, 2017 254,613 — Stock based compensation plans, net 1,103 — Acquisition of Treasury stock — 26,093 Cancellation of Treasury stock (24,026 ) (24,026 ) Balance at December 31, 2018 231,690 2,067 Stock based compensation plans, net 1,310 — Acquisition of Treasury stock — 18,343 Cancellation of Treasury stock (18,379 ) (18,379 ) Balance at December 31, 2019 214,621 2,031 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense, tax effect | Stock-based compensation expense was as follows: Year Ended December 31, 2019 2018 2017 Stock-based compensation expense, pre-tax $ 50 $ 57 $ 52 Income tax benefit recognized in earnings 13 14 20 |
Schedule of stock-based payment award valuation assumptions, performance shares, market-based component table | A summary of Xerox Holdings key valuation input assumptions used in the Monte Carlo simulation relative to the 2019 and 2018 PSU awards granted were as follows: 2019 Award 2018 Award Term 3 years 3 years Risk-free interest rate (1) 2.51 % 2.39 % Dividend yield (2) 3.97 % 3.24 % Volatility (3) 32.95 % 29.12 % Weighted average fair value (4) $ 16.27 $ 32.01 ____________ (1) The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the performance period. (2) The dividend yield was calculated as the expected quarterly dividend divided by our three-month average stock price as of the valuation date, annualized and continuously compounded. (3) Volatility is derived from historical stock prices as well as implied volatility when appropriate and available. (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 | Total Return Targets (1) Payout Percentage $40.00 and above 200 % $35.00 100 % $30.00 50 % Below $30.00 0 % Our 2018 TSR metric compared to the peer group TSR will determine the payout as follows: Percentile Payout as 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 | 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 were 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 term-matched historical volatility and implied volatility from traded options. (3) The dividend yield was calculated as the expected quarterly dividend divided by our 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 2019 2018 2017 Shares Weighted Average Grant Date Fair Value (1) Shares Weighted Average Grant Date Fair Value (1) Shares Weighted Average Grant Date Fair Value Restricted Stock Units (2) Outstanding at January 1 3,559 $ 29.51 2,856 $ 30.65 1,807 $ 30.10 Granted 1,366 23.22 1,595 27.82 1,436 31.39 Vested (1,666 ) 29.28 (214 ) 30.39 (117 ) 36.99 Forfeited (414 ) 27.85 (678 ) 30.04 (270 ) 29.03 Outstanding at December 31 2,845 26.87 3,559 29.51 2,856 30.65 Performance Shares Outstanding at January 1 2,462 $ 29.83 3,117 $ 31.54 5,054 $ 33.98 Granted 1,433 19.46 1,060 27.36 1,349 32.80 Vested (633 ) 29.56 (853 ) 32.59 (1,413 ) 37.44 Forfeited/Expired (432 ) 27.50 (862 ) 30.26 (1,873 ) 34.59 Outstanding at December 31 2,830 24.99 2,462 29.83 3,117 31.54 Stock Options Outstanding at January 1 1,022 $ 27.84 — $ — — $ — Granted — — 1,414 27.88 — — Forfeited/Expired (92 ) 27.92 (392 ) 27.98 — — Exercised (69 ) 27.98 — — — — Outstanding at December 31 861 27.83 1,022 27.84 — — Exercisable at December 31 233 27.83 39 27.98 — — ____________ (1) Exercise price for stock options. (2) Includes a 2018 Restricted Stock Award (RSA) grant of 351 shares with a corresponding grant date fair value of $28.51 , which vested in 2019. |
Schedule of unrecognized compensation cost, nonvested awards | Unrecognized compensation cost related to non-vested stock-based awards at December 31, 2019 was as follows: Awards Unrecognized Compensation Remaining Weighted-Average Vesting Period (Years) Restricted Stock Units $ 30 1.6 Performance Shares 28 1.7 Stock Options 2 1.3 Total $ 60 |
Schedule of aggregate intrinsic value restricted stock and performance shares compensation awards | The aggregate intrinsic value of outstanding stock-based awards was as follows: Awards December 31, 2019 Restricted Stock Units $ 105 Performance Shares 104 Stock Options 8 |
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, 2019 December 31, 2018 December 31, 2017 Awards Total Intrinsic Value (1) Cash Received Tax Benefit Total Intrinsic Value Cash Received Tax Benefit Total Intrinsic Value Cash Received Tax Benefit Restricted Stock Units $ 55 $ — $ 11 $ 6 $ — $ 2 $ 3 $ — $ 1 Performance Share Units 23 — 6 21 — 4 40 — 12 Stock Options 1 2 — — — — — — — ____________ (1) RSUs include a RSA grant of 351 |
Other Comprehensive (Loss) In_2
Other Comprehensive (Loss) Income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Comprehensive Income [Abstract] | |
Schedule of amounts recognized in other comprehensive income (loss) | Other Comprehensive (Loss) Income is comprised of the following: Year Ended December 31, 2019 2018 2017 Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax Translation Adjustments Gains (Losses) Aggregate adjustment in period $ 53 $ 45 $ (251 ) $ (242 ) $ 484 $ 483 Divestiture - reclassification 17 17 — — — — Net Translation Adjustments Gains (Losses) 70 62 (251 ) (242 ) 484 483 Unrealized Gains (Losses) Changes in fair value of cash flow hedges gains (losses) 2 1 9 8 (28 ) (23 ) Changes in cash flow hedges reclassed to earnings (1) (9 ) (7 ) 14 10 35 25 Other losses — — (2 ) (2 ) (1 ) (1 ) Net Unrealized (Losses) Gains (7 ) (6 ) 21 16 6 1 Defined Benefit Plans (Losses) Gains Net actuarial/prior service (losses) gains (275 ) (202 ) 273 198 52 64 Prior service amortization/curtailment (2) (81 ) (61 ) (26 ) (20 ) (10 ) (7 ) Actuarial loss amortization/settlement (2) 156 118 252 190 236 158 Fuji Xerox changes in defined benefit plans, net (3) 8 8 (25 ) (25 ) 29 29 Other (losses) gains (4) (21 ) (21 ) 66 66 (138 ) (138 ) Divestiture - reclassification 148 148 — — — — Changes in Defined Benefit Plans (Losses) Gains (65 ) (10 ) 540 409 169 106 Other Comprehensive (Loss) Income (2 ) 46 310 183 659 590 Less: Other comprehensive income attributable to noncontrolling interests — — — — 1 1 Other Comprehensive (Loss) Income Attributable to Xerox Holdings $ (2 ) $ 46 $ 310 $ 183 $ 658 $ 589 _____________ (1) Reclassified to Cost of sales - refer to Note 17 - Financial Instruments for additional information regarding our cash flow hedges. (2) Reclassified to Total Net Periodic Benefit Cost - refer to Note 19 - Employee Benefit Plans for additional information. (3) Represents our share of Fuji Xerox's benefit plan changes. (4) Primarily represents currency impact on cumulative amount of benefit plan net actuarial losses and prior service credits in AOCL. |
Schedule of accumulated other comprehensive loss | AOCL is comprised of the following: December 31, 2019 2018 2017 Cumulative translation adjustments $ (1,961 ) $ (2,023 ) $ (1,781 ) Other unrealized (losses) gains, net (2 ) 4 (12 ) Benefit plans net actuarial losses and prior service credits (1)(2) (1,683 ) (1,546 ) (1,955 ) Total Accumulated Other Comprehensive Loss Attributable to Xerox Holdings $ (3,646 ) $ (3,565 ) $ (3,748 ) _____________ (1) Amounts prior to 2019 include our share of Fuji Xerox balances. (2) The change from December 31, 2018 includes $(127) related to the adoption of ASU 2018-02 and the reclassification of stranded tax effects resulting from the Tax Act - Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share of Xerox Holdings' common stock (shares in thousands): Year Ended December 31, 2019 2018 2017 Basic Earnings per Share: Net Income from continuing operations attributable to Xerox Holdings $ 648 $ 306 $ 66 Accrued dividends on preferred stock (14 ) (14 ) (14 ) Adjusted Net income from continuing operations available to common shareholders 634 292 52 Income from discontinued operations attributable to Xerox Holdings, net of tax 705 55 129 Adjusted Net income available to common shareholders $ 1,339 $ 347 $ 181 Weighted-average common shares outstanding 221,969 248,707 254,341 Basic Earnings per Share: Continuing operations $ 2.86 $ 1.17 $ 0.20 Discontinued operations 3.17 0.23 0.51 Basic Earnings per Share $ 6.03 $ 1.40 $ 0.71 Diluted Earnings per Share: Net Income from continuing operations attributable to Xerox Holdings $ 648 $ 306 $ 66 Accrued dividends on preferred stock — (14 ) (14 ) Adjusted Net income from continuing operations available to common shareholders 648 292 52 Income from discontinued operations attributable to Xerox Holdings, net of tax 705 55 129 Adjusted Net income available to common shareholders $ 1,353 $ 347 $ 181 Weighted-average common shares outstanding 221,969 248,707 254,341 Common shares issuable with respect to: Stock options 55 — — Restricted stock and performance shares 4,403 2,953 2,229 Convertible preferred stock 6,742 — — Adjusted Weighted average common shares outstanding 233,169 251,660 256,570 Diluted Earnings per Share: Continuing operations $ 2.78 $ 1.16 $ 0.20 Discontinued operations 3.02 0.22 0.51 Diluted Earnings per Share $ 5.80 $ 1.38 $ 0.71 The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands): Stock options 805 1,022 — Restricted stock and performance shares 1,272 3,068 3,706 Convertible preferred stock — 6,742 6,742 Total Anti-Dilutive Securities 2,077 10,832 10,448 Dividends per Common Share $ 1.00 $ 1.00 $ 1.00 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) $ / shares in Units, £ in Millions, $ in Millions | Aug. 01, 2019USD ($)$ / sharesshares | Jul. 31, 2019 | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2019USD ($)countryservice_offering | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018GBP (£) | ||
Reorganization, conversion ratio | 1 | |||||||||
Stock issued for conversion of convertible securities (shares) | shares | 100 | |||||||||
Par value of common stock (dollars per share) | $ / shares | $ 1 | |||||||||
Number of countries in which entity operates | country | 160 | |||||||||
Revenues | $ 9,066 | $ 9,662 | $ 9,991 | |||||||
Cumulative effect of change in accounting principles | $ 0 | [1] | 120 | |||||||
Economic life of leased product | 5 years | |||||||||
Sustaining engineering costs | $ 62 | 72 | 90 | |||||||
Number of reportable segments | service_offering | 1 | |||||||||
Number of reporting units | service_offering | 1 | |||||||||
Expected return on plan assets period | 2 years | |||||||||
Sales | ||||||||||
Revenues | [2] | $ 3,227 | 3,454 | 3,412 | ||||||
Accounting Standards Update 2016-02 | ||||||||||
Lessee accounting, increase to leased assets and liabilities | 385 | |||||||||
Lessee accounting, increase to leased assets and liabilities, undiscounted | 440 | |||||||||
Lessor accounting - increase to equipment sales | $ 30 | |||||||||
Accounting Standards Update 2014-09 | ||||||||||
Transition asset | $ 153 | |||||||||
Cumulative effect of change in accounting principles | $ 117 | |||||||||
Accounting Standards Update 2014-09 | Sales | ||||||||||
Revenues | $ 44 | |||||||||
United Kingdom, Pounds | ||||||||||
Out-of-period adjustment, gross | £ | £ (40) | |||||||||
United States of America, Dollars | ||||||||||
Out-of-period adjustment, gross | 53 | |||||||||
Out-of-period adjustment, net | 43 | |||||||||
Minimum | ||||||||||
Ownership percentage (percent) | 20.00% | |||||||||
Maximum | ||||||||||
Ownership percentage (percent) | 50.00% | |||||||||
Common Stock | ||||||||||
Value of stock issued for conversion of convertible securities | $ (221) | |||||||||
Retained Earnings | ||||||||||
Cumulative effect of change in accounting principles | [3] | $ 127 | [1] | 120 | ||||||
Retained Earnings | Accounting Standards Update 2018-02 | ||||||||||
Tax cuts and jobs act, reclassification from AOCI to retained earnings, tax effect | $ 127 | |||||||||
Retained Earnings | Accounting Standards Update 2014-09 | ||||||||||
Cumulative effect of change in accounting principles | [3] | $ 117 | ||||||||
[1] | Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Income Taxes for additional information related to the adoption of ASU 2018-02. | |||||||||
[2] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information. | |||||||||
[3] | Includes $117 related to the adoption of the Revenue Recognition Standard ASU 2014-09 - Revenue from Contracts with Customers (ASC Topic 606), see Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, and $3 related to our share of Fuji Xerox's adoption of ASU 2016-01 - Financial Instruments - Classification and Measurement. |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Change in Presentation (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Impact of Revisions [Line Items] | ||||
Revenues | $ 9,066 | $ 9,662 | $ 9,991 | |
Sales | ||||
Impact of Revisions [Line Items] | ||||
Revenues | [1] | 3,227 | 3,454 | 3,412 |
Cost of goods and services sold | [1] | 2,097 | 2,188 | 2,133 |
Sales | Previously Reported | ||||
Impact of Revisions [Line Items] | ||||
Revenues | 3,805 | 3,801 | ||
Cost of goods and services sold | 2,305 | 2,273 | ||
Sales | Restatement Adjustment | ||||
Impact of Revisions [Line Items] | ||||
Revenues | (351) | (389) | ||
Cost of goods and services sold | (117) | (140) | ||
Service | ||||
Impact of Revisions [Line Items] | ||||
Revenues | [1] | 5,595 | 5,940 | 6,285 |
Cost of goods and services sold | [1] | $ 3,188 | 3,473 | 3,654 |
Service | Previously Reported | ||||
Impact of Revisions [Line Items] | ||||
Revenues | 5,589 | 5,896 | ||
Cost of goods and services sold | 3,356 | 3,514 | ||
Service | Restatement Adjustment | ||||
Impact of Revisions [Line Items] | ||||
Revenues | 351 | 389 | ||
Cost of goods and services sold | $ 117 | $ 140 | ||
[1] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
Adoption of New Leasing Stand_5
Adoption of New Leasing Standard - Lessee - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Remaining terms of leases | 11 years | ||
Remaining lease obligation | $ 7 | ||
Finance leases, discount rate | 4.07% | ||
Finance lease, right-of-use asset | $ 7 | ||
Net of sublease income | $ 147 | $ 161 |
Adoption of New Leasing Stand_6
Adoption of New Leasing Standard - Lessee - Components of Lease Expense (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 125 |
Short-term lease expense | 21 |
Variable lease expense | 48 |
Sublease income | (1) |
Total Lease expense | $ 193 |
Adoption of New Leasing Stand_7
Adoption of New Leasing Standard - Lessee - Operating Lease ROU Asset, Net and Operating Lease Liabilities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Other long-term assets | $ 319 |
Accrued expenses and other current liabilities | 87 |
Other long-term liabilities | 260 |
Total Operating lease liabilities | $ 347 |
Adoption of New Leasing Stand_8
Adoption of New Leasing Standard - Lessee - Supplemental Information Related to Operating Leases (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows | $ 126 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 75 |
Weighted-average remaining lease term (years) | 4 years |
Weighted-average discount rate (percentage) | 5.47% |
Adoption of New Leasing Stand_9
Adoption of New Leasing Standard - Lessee - Maturities and Additional Information Related to Operating Lease Liabilities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 109 |
2021 | 87 |
2022 | 73 |
2023 | 56 |
2024 | 24 |
Thereafter | 45 |
Total Lease payments | 394 |
Less: Imputed interest | 47 |
Total Operating lease liabilities | $ 347 |
Adoption of New Leasing Stan_10
Adoption of New Leasing Standard - Lessee - Future Minimum Operating Lease Commitments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 114 |
2020 | 88 |
2021 | 64 |
2022 | 50 |
2023 | 36 |
Thereafter | 27 |
Total Operating lease commitments | $ 379 |
Adoption of New Leasing Stan_11
Adoption of New Leasing Standard - Lessor - Components of Lease Income (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Economic life of leased product | 5 years | |
Lease income - sales type | $ 672 | |
Lease income - sales type | $ 699 | |
Interest income on lease receivables | 244 | |
Interest income on lease receivables | 268 | |
Lease income - operating leases | 396 | |
Lease income - operating leases | 438 | |
Variable lease income | 107 | |
Variable lease income | 120 | |
Total Lease income | 1,419 | |
Total Lease income | 1,525 | |
Profit at lease commencement, sales type leases | $ 276 | |
Profit at lease commencement, sales type leases | $ 302 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | $ 9,066 | $ 9,662 | $ 9,991 | |
Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 2,062 | 2,178 | 2,152 | |
Supplies, paper and other sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 1,165 | 1,276 | 1,260 | |
Maintenance agreements | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 2,372 | 2,603 | 2,809 | |
Service arrangements | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 2,517 | 2,674 | 2,722 | |
Rental and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 706 | 663 | 754 | |
Financing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 244 | 268 | 294 | |
Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | [1] | 3,227 | 3,454 | 3,412 |
Sales | Sales channels, direct equipment lease | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 672 | 699 | 718 | |
Sales | Sales channels, distributors and resellers | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 1,343 | 1,445 | 1,502 | |
Sales | Sales channels, customer direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 1,212 | 1,310 | 1,192 | |
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | [1] | 5,595 | 5,940 | 6,285 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 5,429 | 5,610 | 5,790 | |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 2,326 | 2,625 | 2,697 | |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 518 | 569 | 648 | |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | $ 793 | $ 858 | 856 | |
Accounting Standards Update 2014-09 | Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 44 | |||
Accounting Standards Update 2014-09 | Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | $ 44 | |||
[1] | Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | $ 137 | $ 116 |
Contract liability amortization period (years) | 30 months | |
Deferred incremental direct costs, amortization period (years) | 4 years | |
Customer contract costs, net | $ 163 | 172 |
Amortization period of incremental direct costs of obtaining a contract (years) | 4 years | |
Contract Fulfillment Costs and Inducements | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Capitalized contract costs, deferred | $ 13 | 12 |
Amortization of capitalized contract fulfillment and inducement costs | $ 5 | $ 5 |
Revenue - Contract Costs (Detai
Revenue - Contract Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Incremental direct costs of obtaining a contract | $ 78 | $ 84 |
Amortization of incremental direct costs | $ 88 | $ 95 |
Segment and Geographic Area R_3
Segment and Geographic Area Reporting - Revenue and Long-lived Assets by Geography (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)service_offering | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | service_offering | 1 | ||
Total Revenues | $ 9,066 | $ 9,662 | $ 9,991 |
Long-Lived Assets | 1,231 | 1,094 | |
United States | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 5,429 | 5,610 | 5,790 |
Long-Lived Assets | 769 | 670 | |
Europe | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 2,326 | 2,625 | 2,697 |
Long-Lived Assets | 305 | 277 | |
Other areas | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 1,311 | 1,427 | $ 1,504 |
Long-Lived Assets | $ 157 | $ 147 |
Acquisitions (Details)
Acquisitions (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)business | |
Schedule of Business Acquisitions, by Acquisition [Line Items] | |||
Payments to acquire business | $ 42,000,000 | $ 0 | $ 87,000,000 |
Payments to acquire assets | 4,000,000 | ||
ROA and HBS | |||
Schedule of Business Acquisitions, by Acquisition [Line Items] | |||
Payments to acquire business | $ 38,000,000 | ||
2019 Acquisitions | |||
Schedule of Business Acquisitions, by Acquisition [Line Items] | |||
Percentage of business acquired | 100.00% | ||
Percentage of goodwill expected to be deductible | 100.00% | ||
Revenue of acquiree since date of acquisition | $ 18,000,000 | ||
2018 Acquisitions | |||
Schedule of Business Acquisitions, by Acquisition [Line Items] | |||
Payments to acquire business | 0 | ||
XBS | |||
Schedule of Business Acquisitions, by Acquisition [Line Items] | |||
Payments to acquire business | $ 87,000,000 | ||
Number of businesses acquired | business | 2 | ||
Percentage of business acquired | 100.00% | ||
Revenue of acquiree since date of acquisition | $ 76,000,000 | $ 79,000,000 | $ 54,000,000 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisitions (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 3,900 | $ 3,858 | $ 3,921 | $ 3,778 |
2019 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Accounts/finance receivables | 3 | |||
Goodwill | 14 | |||
Other assets | 3 | |||
Total Assets acquired | 41 | |||
Liabilities assumed | (3) | |||
Total Purchase Price | $ 38 | |||
Customer relationships | 2019 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, weighted average life (years) | 10 years | |||
Intangible assets | $ 19 | |||
Trademarks | 2019 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, weighted average life (years) | 5 years | |||
Intangible assets | $ 2 |
Divestitures - Narrative (Detai
Divestitures - Narrative (Details) | Aug. 01, 2017USD ($) | Nov. 30, 2019USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain (loss) reclassified from AOCL | $ 17,000,000 | $ 0 | $ 0 | ||||
Goodwill | $ 3,778,000,000 | 3,900,000,000 | 3,858,000,000 | $ 3,921,000,000 | |||
Cash distribution, Conduent to Xerox, prior to distribution date | $ 1,800,000,000 | ||||||
Short-term debt and current portion of long-term debt | $ 1,049,000,000 | 961,000,000 | |||||
Conduent | Unsecured Debt | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Short-term debt and current portion of long-term debt | $ 1,000,000,000 | ||||||
Naver | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Sales price of disposal group or unit | $ 23,000,000 | ||||||
Gain (loss) on disposal | 13,000,000 | ||||||
Gain on sale of business, net of tax | $ 4,000,000 | ||||||
Employees transferred in sale | 80 | ||||||
Fuji Xerox Co., Ltd. | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
License fee received | $ 77,000,000 | ||||||
Discontinued Operations, Disposed of by Sale | Fuji Xerox Co., Ltd. | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Ownership percentage (percent) | 25.00% | ||||||
Proceeds from sale of equity method investments | $ 2,200,000,000 | ||||||
Goodwill | $ 0 | ||||||
Discontinued Operations, Disposed of by Sale | Xerox International Partners | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Ownership percentage (percent) | 51.00% | ||||||
Proceeds from sale of equity method investments | $ 23,000,000 | ||||||
Goodwill | 9,000,000 | ||||||
Disposal Group, Including Discontinued Operation, Noncontrolling Interest | 32,000,000 | $ 36,000,000 | |||||
Discontinued Operations, Disposed of by Sale | Fuji Xerox Co., Ltd. and Xerox International Partners, The Sales | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Realized gain (loss) on sale | 629,000,000 | ||||||
Realized gain (loss) on sale, after tax | 539,000,000 | ||||||
Gain (loss) reclassified from AOCL | 165,000,000 | ||||||
Transaction costs | $ 9,000,000 |
Divestitures - Discontinued Ope
Divestitures - Discontinued Operation - Income Statement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | $ 79 | $ 168 | $ 274 |
Income (loss) from operations | 176 | 74 | 138 |
Gain on disposal | 629 | 0 | 0 |
Income before income taxes | 805 | 74 | 138 |
Income tax expense | 95 | 10 | 1 |
Income from discontinued operations, net of tax | 710 | 64 | 137 |
Income from discontinued operations attributable to noncontrolling interests, net of tax | 5 | 9 | 8 |
Income from discontinued operations, attributable to Xerox, net of tax | 705 | 55 | 129 |
Cost of revenues | 44 | 110 | 218 |
Other expenses | 6 | 9 | 20 |
Total Costs and Expenses | 50 | 119 | 238 |
Depreciation and amortization | 0 | 0 | 1 |
Restructuring and related costs | 0 | 1 | 0 |
Equity in net income of FX | 147 | 25 | 102 |
Capital expenditures | $ 0 | $ 0 | 0 |
Business Process Outsourcing | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Income from discontinued operations, attributable to Xerox, net of tax | 3 | ||
Loss from operations | (9) | ||
Tax benefit from disposal | $ 12 |
Divestitures - Discontinued O_2
Divestitures - Discontinued Operations - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Nov. 30, 2019 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total current assets | $ 0 | $ 19 | |
Total current liabilities | $ 0 | 21 | |
Fuji Xerox Co., Ltd. and Xerox International Partners, The Sales | Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash and cash equivalents | $ 1 | 3 | |
Accounts receivable, net | 3 | 6 | |
Inventories | 5 | 7 | |
Other current assets | 0 | 3 | |
Total current assets | 9 | 19 | |
Land, building and equipment, net | 1 | ||
Land, building and equipment, net | 1 | ||
Goodwill | 9 | 9 | |
Other long-term assets | 1,471 | 1,342 | |
Total Assets of discontinued operations | 1,490 | 1,371 | |
Accounts payable | 8 | 18 | |
Accrued compensation and benefits costs | 1 | 1 | |
Accrued expenses and other current liabilities | 2 | 2 | |
Total current liabilities | 11 | 21 | |
Other long-term liabilities | 1 | 0 | |
Total Liabilities of discontinued operations | $ 12 | $ 21 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, net | $ 1,236 | $ 1,270 | |
Accounts receivable sold, derecognized and uncollected at balance sheet date | 165 | 131 | |
Accounts receivable sales | 393 | 405 | $ 1,733 |
Deferred proceeds | 0 | 0 | 164 |
Loss on sale of accounts receivable | 3 | 3 | $ 10 |
Accounts Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Invoiced | 980 | 992 | |
Accrued | 311 | 334 | |
Allowance for doubtful accounts | $ (55) | $ (56) |
Finance Receivables, Net - Fina
Finance Receivables, Net - Finance Receivables and Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | |||
Gross receivables | $ 3,865 | $ 4,003 | |
Unearned income | (425) | (439) | |
Financing receivables, before allowance for credit loss | 3,440 | 3,564 | |
Residual values | 0 | 0 | |
Allowance for doubtful accounts | (89) | (92) | $ (108) |
Finance Receivables, Net | 3,351 | 3,472 | |
Less: Billed portion of finance receivables, net | 111 | 105 | |
Less: Current portion of finance receivables not billed, net | 1,158 | 1,218 | |
Finance Receivables Due After One Year, Net | 2,082 | 2,149 | |
Finance receivables contractual maturity, current | 1,490 | 1,543 | |
Finance receivables contractual maturity, in two years | 1,052 | 1,108 | |
Finance receivables contractual maturities, in three years | 728 | 755 | |
Finance receivables contractual maturities, in four years | 422 | 425 | |
Finance receivables contractual maturities, in five years | 158 | 158 | |
Finance receivables contractual maturities, thereafter | 15 | 14 | |
Total contractual maturities of gross receivables | 3,865 | 4,003 | |
Billed contractual maturities of gross finance receivables | $ 115 | $ 107 |
Finance Receivables, Net - Allo
Finance Receivables, Net - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Finance receivable lease portfolio average maturity - low (years) | 2 years | |
Finance receivable lease portfolio average maturity - high (years) | 3 years | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit loss, beginning of period | $ 92 | $ 108 |
Provision | 28 | 24 |
Charge-offs | (34) | (41) |
Recoveries and other | 3 | 1 |
Allowance for credit loss, end of period | 89 | 92 |
Finance Receivables Collectively Evaluated for Impairment | 3,440 | 3,564 |
United States | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit loss, beginning of period | 53 | 56 |
Provision | 20 | 12 |
Charge-offs | (15) | (17) |
Recoveries and other | 1 | 2 |
Allowance for credit loss, end of period | 59 | 53 |
Finance Receivables Collectively Evaluated for Impairment | 1,922 | 1,946 |
Canada | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit loss, beginning of period | 12 | 15 |
Provision | 1 | 3 |
Charge-offs | (5) | (6) |
Recoveries and other | 2 | 0 |
Allowance for credit loss, end of period | 10 | 12 |
Finance Receivables Collectively Evaluated for Impairment | 320 | 335 |
Europe | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit loss, beginning of period | 25 | 35 |
Provision | 7 | 9 |
Charge-offs | (14) | (18) |
Recoveries and other | 0 | (1) |
Allowance for credit loss, end of period | 18 | 25 |
Finance Receivables Collectively Evaluated for Impairment | 1,155 | 1,239 |
Other | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit loss, beginning of period | 2 | 2 |
Provision | 0 | 0 |
Charge-offs | 0 | 0 |
Recoveries and other | 0 | 0 |
Allowance for credit loss, end of period | 2 | 2 |
Finance Receivables Collectively Evaluated for Impairment | $ 43 | $ 44 |
Finance Receivables, Net - Fi_2
Finance Receivables, Net - Finance Receivables Credit Quality Indicators (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loss rates of customers with investment grade credit quality (percentage) | 1.00% | |
Loss rates of customers with non-investment grade credit quality, low range (percentage) | 2.00% | |
Loss rates of customers with non-investment grade credit quality, high range (percentage) | 5.00% | |
Loss rates of customers with sub-standard doubtful credit quality, low range (percentage) | 7.00% | |
Loss rates of customers with sub-standard doubtful credit quality, high range (percentage) | 10.00% | |
Financing receivables, before allowance for credit loss | $ 3,440 | $ 3,564 |
Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,716 | 1,798 |
Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,352 | 1,378 |
Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 372 | 388 |
United States | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,922 | 1,946 |
United States | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 898 | 947 |
United States | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 776 | 748 |
United States | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 248 | 251 |
Canada | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 320 | 335 |
Canada | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 163 | 162 |
Canada | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 91 | 99 |
Canada | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 66 | 74 |
Total Europe | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,155 | 1,239 |
Total Europe | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 624 | 658 |
Total Europe | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 473 | 518 |
Total Europe | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 58 | 63 |
France | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 367 | 418 |
France | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 206 | 232 |
France | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 137 | 157 |
France | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 24 | 29 |
UK Ireland | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 241 | 244 |
UK Ireland | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 154 | 150 |
UK Ireland | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 79 | 87 |
UK Ireland | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 8 | 7 |
Central | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 298 | 327 |
Central | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 176 | 196 |
Central | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 113 | 123 |
Central | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 9 | 8 |
Southern | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 205 | 205 |
Southern | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 65 | 52 |
Southern | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 125 | 136 |
Southern | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 15 | 17 |
Nordic | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 44 | 45 |
Nordic | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 23 | 28 |
Nordic | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 19 | 15 |
Nordic | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 2 | 2 |
Other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 43 | 44 |
Other | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 31 | 31 |
Other | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 12 | 13 |
Other | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
Direct | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,103 | 1,237 |
Direct | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 640 | 785 |
Direct | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 331 | 348 |
Direct | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 132 | 104 |
Indirect | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 819 | 709 |
Indirect | Investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 258 | 162 |
Indirect | Non-investment Grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | 445 | 400 |
Indirect | Sub-standard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing receivables, before allowance for credit loss | $ 116 | $ 147 |
Finance Receivables, Net - Fi_3
Finance Receivables, Net - Finance Receivables Aging Schedule (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | $ 3,440 | $ 3,564 |
Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 115 | 107 |
Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 3,325 | 3,457 |
United States | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,922 | 1,946 |
United States | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 89 | 80 |
United States | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,833 | 1,866 |
Canada | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 320 | 335 |
Canada | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 10 | 10 |
Canada | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 310 | 325 |
Total Europe | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,155 | 1,239 |
Total Europe | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 13 | 15 |
Total Europe | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,142 | 1,224 |
France | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 367 | 418 |
France | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 3 | 5 |
France | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 364 | 413 |
UK Ireland | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 241 | 244 |
UK Ireland | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 2 | 2 |
UK Ireland | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 239 | 242 |
Central | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 298 | 327 |
Central | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 3 | 3 |
Central | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 295 | 324 |
Southern | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 205 | 205 |
Southern | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 5 | 5 |
Southern | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 200 | 200 |
Nordic | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 44 | 45 |
Nordic | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
Nordic | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 44 | 45 |
Other | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 43 | 44 |
Other | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 3 | 2 |
Other | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 40 | 42 |
Current | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 82 | 76 |
Current | United States | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 62 | 56 |
Current | Canada | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 8 | 7 |
Current | Total Europe | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 10 | 11 |
Current | France | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 3 | 5 |
Current | UK Ireland | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 2 | 2 |
Current | Central | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 2 | 1 |
Current | Southern | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 3 | 3 |
Current | Nordic | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
Current | Other | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 2 | 2 |
31-90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 19 | 19 |
31-90 Days Past Due | United States | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 16 | 15 |
31-90 Days Past Due | Canada | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1 | 2 |
31-90 Days Past Due | Total Europe | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1 | 2 |
31-90 Days Past Due | France | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
31-90 Days Past Due | UK Ireland | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
31-90 Days Past Due | Central | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 1 |
31-90 Days Past Due | Southern | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1 | 1 |
31-90 Days Past Due | Nordic | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
31-90 Days Past Due | Other | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1 | 0 |
90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 14 | 12 |
90 Days Past Due | United States | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 11 | 9 |
90 Days Past Due | Canada | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1 | 1 |
90 Days Past Due | Total Europe | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 2 | 2 |
90 Days Past Due | France | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
90 Days Past Due | UK Ireland | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
90 Days Past Due | Central | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1 | 1 |
90 Days Past Due | Southern | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1 | 1 |
90 Days Past Due | Nordic | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
90 Days Past Due | Other | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 0 | 0 |
90 Days and Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 106 | 102 |
90 Days and Accruing | United States | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 57 | 54 |
90 Days and Accruing | Canada | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 17 | 22 |
90 Days and Accruing | Total Europe | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 32 | 26 |
90 Days and Accruing | France | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 15 | 14 |
90 Days and Accruing | UK Ireland | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 0 | 0 |
90 Days and Accruing | Central | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 13 | 6 |
90 Days and Accruing | Southern | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 4 | 6 |
90 Days and Accruing | Nordic | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 0 | 0 |
90 Days and Accruing | Other | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 0 | 0 |
Direct | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,103 | 1,237 |
Direct | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 56 | 56 |
Direct | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 1,047 | 1,181 |
Direct | Current | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 37 | 38 |
Direct | 31-90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 11 | 11 |
Direct | 90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 8 | 7 |
Direct | 90 Days and Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | 57 | 54 |
Indirect | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 819 | 709 |
Indirect | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 33 | 24 |
Indirect | Unbilled | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 786 | 685 |
Indirect | Current | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 25 | 18 |
Indirect | 31-90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 5 | 4 |
Indirect | 90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, before allowance for credit loss | 3 | 2 |
Indirect | 90 Days and Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Financing Receivable, 90 Days or More Past Due, Still Accruing | $ 0 | $ 0 |
Inventories and Equipment on _3
Inventories and Equipment on Operating Leases, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Inventories, net [Abstract] | |||
Finished goods | $ 576 | $ 710 | |
Work-in-process | 47 | 49 | |
Raw materials | 71 | 70 | |
Total Inventories | 694 | 829 | |
Inventories and Equipment on Operating Lease, Net [Abstract] | |||
Equipment on operating leases | 1,519 | ||
Accumulated depreciation | (1,077) | ||
Equipment on operating leases, net | 364 | 442 | |
Property Subject to or Available for Operating Lease [Line Items] | |||
Equipment on operating leases | 2,804 | ||
Accumulated depreciation | (2,306) | ||
Land, buildings and equipment, net | 498 | ||
Contingent rental revenue on operating leases | 107 | 120 | $ 119 |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |||
12 months | 226 | ||
12 months | 260 | ||
24 months | 139 | ||
24 months | 178 | ||
36 months | 84 | ||
36 months | 111 | ||
48 months | 39 | ||
48 months | 61 | ||
60 months | 12 | ||
60 months | 21 | ||
Thereafter | 2 | ||
Thereafter | 2 | ||
Total | $ 502 | ||
Total | $ 633 | ||
Minimum | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Equipment on operating lease depreciable lives | 3 years | ||
Maximum | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Equipment on operating lease depreciable lives | 5 years | ||
Assets Leased to Others | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Equipment on operating leases | $ 1,443 | ||
Accumulated depreciation | (1,079) | ||
Land, buildings and equipment, net | $ 364 |
Land, Buildings, Equipment an_3
Land, Buildings, Equipment and Software, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Land, Building and Equipment, net [Line Items] | |||
Equipment on operating leases | $ 2,804 | ||
Land, buildings, and equipment | $ 2,698 | ||
Accumulated depreciation | (2,272) | ||
Accumulated depreciation | (2,306) | ||
Land, buildings and equipment, net | 426 | ||
Land, buildings and equipment, net | 498 | ||
Depreciation expense | 101 | 148 | $ 136 |
Finance leased assets | 7 | ||
Finance leased assets | 9 | ||
Land | |||
Land, Building and Equipment, net [Line Items] | |||
Equipment on operating leases | 12 | ||
Land, buildings, and equipment | 12 | ||
Building and building equipment | |||
Land, Building and Equipment, net [Line Items] | |||
Equipment on operating leases | 793 | ||
Land, buildings, and equipment | 794 | ||
Leasehold improvements | |||
Land, Building and Equipment, net [Line Items] | |||
Equipment on operating leases | 178 | ||
Land, buildings, and equipment | 135 | ||
Plant machinery | |||
Land, Building and Equipment, net [Line Items] | |||
Equipment on operating leases | 1,143 | ||
Land, buildings, and equipment | 1,124 | ||
Office furniture and equipment | |||
Land, Building and Equipment, net [Line Items] | |||
Equipment on operating leases | 607 | ||
Land, buildings, and equipment | 565 | ||
Other | |||
Land, Building and Equipment, net [Line Items] | |||
Equipment on operating leases | 45 | ||
Land, buildings, and equipment | 45 | ||
Construction in progress | |||
Land, Building and Equipment, net [Line Items] | |||
Equipment on operating leases | $ 26 | ||
Land, buildings, and equipment | $ 23 | ||
Minimum | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 3 years | ||
Minimum | Building and building equipment | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 25 years | ||
Minimum | Plant machinery | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 5 years | ||
Minimum | Office furniture and equipment | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 3 years | ||
Minimum | Other | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 4 years | ||
Maximum | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 5 years | ||
Maximum | Building and building equipment | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 50 years | ||
Maximum | Plant machinery | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 12 years | ||
Maximum | Office furniture and equipment | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 15 years | ||
Maximum | Other | |||
Land, Building and Equipment, net [Line Items] | |||
Estimated Useful Lives (Years) | 20 years |
Land, Buildings, Equipment an_4
Land, Buildings, Equipment and Software, Net - Internal Use Software (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Land, Buildings, Equipment and Software [Abstract] | ||
Internal use software, capitalized costs, net | $ 122 | $ 154 |
Internal use, useful lives, minimum, years | 3 years | |
Internal use, useful lives, maximum, years | 7 years |
Investment in Affiliates, at _3
Investment in Affiliates, at Equity (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Investments in affiliates, at equity | $ 46 | $ 1,403 | ||
Total Equity in net income of unconsolidated affiliates | 8 | 8 | $ 13 | |
Fuji Xerox | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investments in affiliates, at equity | 0 | 1,360 | ||
Total Equity in net income of unconsolidated affiliates | $ 147 | 25 | 102 | |
Ownership percentage (percent) | 25.00% | 25.00% | ||
After-tax restructuring and other charges | $ 20 | 95 | 10 | |
Dividends received from Fuji Xerox | 69 | 23 | 46 | |
Other | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investments in affiliates, at equity | 46 | 43 | ||
Total Equity in net income of unconsolidated affiliates | 8 | 8 | 13 | |
Fuji Xerox And Other | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total Equity in net income of unconsolidated affiliates | $ 155 | $ 33 | $ 115 |
Investment in Affiliates, at _4
Investment in Affiliates, at Equity - Condensed Financial Data for Fuji Xerox Unconsolidated Affiliate (Details) - Fuji Xerox - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Nov. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Operations | |||
Revenues | $ 7,667 | $ 9,161 | $ 9,638 |
Costs and expenses | 6,814 | 8,880 | 9,072 |
Income before income taxes | 853 | 281 | 566 |
Income tax expense | 258 | 160 | 144 |
Net Income | 595 | 121 | 422 |
Less: Net income - noncontrolling interests | 3 | 2 | 5 |
Net Income - Fuji Xerox | 592 | 119 | 417 |
Assets: | |||
Current assets | 4,876 | 4,179 | 4,315 |
Long-term assets | 3,964 | 4,034 | 4,488 |
Total Assets | 8,840 | 8,213 | 8,803 |
Liabilities and Equity: | |||
Short-term debt | 49 | 130 | 428 |
Other current liabilities | 1,932 | 1,827 | 2,079 |
Long-term debt | 16 | 24 | 76 |
Other long-term liabilities | 514 | 395 | 369 |
Noncontrolling interests | 18 | 30 | 33 |
Fuji Xerox shareholders' equity | 6,311 | 5,807 | 5,818 |
Total Liabilities and Equity | $ 8,840 | $ 8,213 | $ 8,803 |
Investment in Affiliates, at _5
Investment in Affiliates, at Equity - Investment in Affiliate Exchange Rates (Details) - Fuji Xerox | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||
Summary of operations, weighted average rate | 109.03 | 110.28 | 112.14 |
Balance sheet, year-end rate | 108.83 | 110.26 | 112.87 |
Investment in Affiliates, at _6
Investment in Affiliates, at Equity - Other Transactions with Fuji Xerox (Details) - Fuji Xerox - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||
Royalty revenue earned | $ 99 | $ 96 | $ 103 |
Inventory purchases from Fuji Xerox | 1,337 | 1,501 | 1,585 |
Inventory sales to Fuji Xerox | 33 | 43 | 58 |
R&D payments received from Fuji Xerox | 0 | 1 | 1 |
R&D payments paid to Fuji Xerox | 4 | 8 | $ 14 |
Net amounts due to Fuji Xerox | $ 353 | $ 320 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | |||
Beginning Balance, Goodwill | $ (3,858) | $ (3,921) | $ (3,778) |
Foreign currency translation | 28 | (63) | 105 |
Goodwill acquired during period | 14 | ||
Divestiture | (6) | ||
Ending Balance, Goodwill | $ (3,900) | $ (3,858) | (3,921) |
MT Business | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during period | 33 | ||
Other | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during period | 11 | ||
Restatement Adjustment | |||
Goodwill [Roll Forward] | |||
Beginning Balance, Goodwill | $ 9 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Intangible Assets by Major Class (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 539 | $ 715 | |
Accumulated Amortization | 340 | 495 | |
Net Amount | 199 | 220 | |
Amortization of intangible assets | 45 | 48 | $ 53 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2020 | 36 | ||
2021 | 36 | ||
2022 | 32 | ||
2023 | 30 | ||
2024 | $ 18 | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization | 10 years | ||
Gross Carrying Amount | $ 140 | 317 | |
Accumulated Amortization | 86 | 263 | |
Net Amount | $ 54 | 54 | |
Distribution network | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization | 25 years | ||
Gross Carrying Amount | $ 123 | 123 | |
Accumulated Amortization | 99 | 93 | |
Net Amount | $ 24 | 30 | |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization | 20 years | ||
Gross Carrying Amount | $ 258 | 260 | |
Accumulated Amortization | 146 | 133 | |
Net Amount | $ 112 | 127 | |
Technology and non-compete | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization | 12 years | ||
Gross Carrying Amount | $ 18 | 15 | |
Accumulated Amortization | 9 | 6 | |
Net Amount | $ 9 | $ 9 |
Restructuring Programs (Details
Restructuring Programs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring reserve [Roll Forward] | |||
Balance at beginning of period | $ 95 | $ 109 | $ 127 |
Restructuring provision | 161 | 189 | 232 |
Reversals of prior charges | (34) | (33) | (35) |
Net Current Period Charges | 127 | 156 | 197 |
Charges against reserve and currency | (152) | (170) | (215) |
Balance at end of period | 70 | 95 | 109 |
Write-off of leased right-of-use assets | 39 | ||
Write-off of owned assets | 22 | ||
Reconciliation to the Condensed Consolidated Statements of Cash Flows [Abstract] | |||
Asset impairments | 56 | 0 | 7 |
Effects of foreign currency and other non-cash items | 3 | 1 | (12) |
Restructuring Cash Payments | (93) | (169) | (220) |
Severance and Related Costs | |||
Restructuring reserve [Roll Forward] | |||
Balance at beginning of period | 94 | 108 | 104 |
Restructuring provision | 81 | 175 | 221 |
Reversals of prior charges | (24) | (33) | (29) |
Net Current Period Charges | 57 | 142 | 192 |
Charges against reserve and currency | (85) | (156) | (188) |
Balance at end of period | 66 | 94 | 108 |
Other Contractual Termination Costs | |||
Restructuring reserve [Roll Forward] | |||
Balance at beginning of period | 1 | 1 | 23 |
Restructuring provision | 19 | 14 | 4 |
Reversals of prior charges | (5) | 0 | (6) |
Net Current Period Charges | 14 | 14 | (2) |
Charges against reserve and currency | (11) | (14) | (20) |
Balance at end of period | 4 | 1 | 1 |
Asset Impairments | |||
Restructuring reserve [Roll Forward] | |||
Balance at beginning of period | 0 | 0 | 0 |
Restructuring provision | 61 | 0 | 7 |
Reversals of prior charges | (5) | 0 | 0 |
Net Current Period Charges | 56 | 0 | 7 |
Charges against reserve and currency | (56) | 0 | (7) |
Balance at end of period | $ 0 | $ 0 | $ 0 |
Restructuring Programs - Restru
Restructuring Programs - Restructuring and Related Costs (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)employee | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||
Related restructuring costs | $ 102 | ||
Number of employees transferred | employee | 2,200 | ||
Payments for restructuring related costs | $ 65 | ||
Restructuring payments | 93 | $ 169 | $ 220 |
Restructuring related costs | 37 | ||
Retention Related Severance Bonuses | |||
Restructuring Cost and Reserve [Line Items] | |||
Related restructuring costs | 39 | ||
Contractual Severance Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Related restructuring costs | 43 | ||
Consulting and Other Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Related restructuring costs | $ 20 |
Supplementary Financial Infor_3
Supplementary Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Current Assets | ||||
Total Other Current Assets | $ 201 | $ 191 | ||
Other Long-term Assets | ||||
Internal use software, net | 122 | 154 | ||
Customer contract costs, net | 163 | 172 | ||
Operating lease right-of-use asset | 319 | |||
Investments in affiliates, at equity | 46 | 1,403 | ||
Total Other Long-term Assets | 1,338 | 902 | ||
Accrued Expenses and Other Current Liabilities | ||||
Operating lease obligation | 87 | |||
Restructuring related costs | 37 | |||
Total Accrued Expenses and Other Current Liabilities | 984 | 848 | ||
Other Long-term Liabilities | ||||
Operating lease obligation | 260 | |||
Total Other Long-term Liabilities | 512 | 269 | ||
Cash and cash equivalents | 2,740 | 1,081 | ||
Litigation deposits in Brazil | 55 | 61 | ||
Other restricted cash | 0 | 3 | ||
Total Restricted Cash | 55 | 64 | ||
Cash, cash equivalents and restricted cash of continuing operations | 2,795 | 1,145 | ||
Cash, cash equivalents and restricted cash of discontinued operations | 0 | 3 | ||
Cash, cash equivalents and restricted cash | 2,795 | 1,148 | $ 1,368 | $ 2,402 |
Accrued compensation liabilities | 69 | 73 | ||
Deferred compensation liabilities | 22 | 23 | ||
Pension and other benefit liabilities | 1,707 | 1,482 | ||
Provision for receivables | 49 | 40 | 46 | |
Provision for inventory | 24 | 30 | 27 | |
Provision for product warranty | 12 | 14 | 15 | |
Depreciation of buildings and equipment | 101 | 148 | 136 | |
Depreciation and obsolescence of equipment on operating leases | 225 | 249 | 265 | |
Amortization of internal use software | 59 | 81 | 65 | |
Amortization of product software | 0 | 0 | 4 | |
Amortization of acquired intangible assets | 45 | 48 | 53 | |
Amortization of customer contract costs | 93 | 100 | 4 | |
Cost of additions to land, buildings and equipment | 41 | 55 | 69 | |
Cost of additions to internal use software | 24 | 35 | 36 | |
Common stock dividends - Xerox Holdings | 229 | 255 | 274 | |
Preferred stock dividends - Xerox Holdings | 14 | 14 | 17 | |
Payments to noncontrolling interests | 14 | 17 | 18 | |
Repurchases related to stock-based compensation - Xerox Holdings | 28 | 9 | $ 15 | |
Executive Officer | ||||
Other Long-term Liabilities | ||||
Deferred compensation liabilities | 4 | 7 | ||
Fair Value, Recurring | Level 2 | ||||
Other Long-term Liabilities | ||||
Financial liabilities, fair value | 26 | 20 | ||
Pension Plan | ||||
Other Long-term Liabilities | ||||
Pension liabilities | 1,616 | 1,386 | ||
Other Current Assets | ||||
Other Current Assets | ||||
Income taxes receivable | 27 | 14 | ||
Royalties, license fees and software maintenance | 25 | 20 | ||
Restricted cash | 0 | 1 | ||
Prepaid expenses | 29 | 31 | ||
Derivative instruments | 2 | 15 | ||
Advances and deposits | 30 | 28 | ||
Other | 88 | 82 | ||
Other Long-term Assets | ||||
Other Long-term Assets | ||||
Income taxes receivable | 9 | 8 | ||
Prepaid pension costs | 451 | 281 | ||
Internal use software, net | 122 | 154 | ||
Restricted cash | 55 | 63 | ||
Debt issuance costs, net | 3 | 4 | ||
Customer contract costs, net | 176 | 184 | ||
Operating lease right-of-use asset | 319 | |||
Deferred compensation plan investments | 19 | 16 | ||
Investments in affiliates, at equity | 46 | 43 | ||
Other | 137 | 149 | ||
Accrued Expenses and Other Current Liabilities | ||||
Accrued Expenses and Other Current Liabilities | ||||
Income taxes payable | 7 | 33 | ||
Other taxes payable | 79 | 77 | ||
Operating lease obligation | 87 | |||
Finance lease obligation | 2 | |||
Interest payable | 38 | 41 | ||
Restructuring reserves | 70 | 93 | ||
Restructuring related costs | 37 | 0 | ||
Derivative instruments | 8 | 1 | ||
Product warranties | 6 | 5 | ||
Dividends payable | 66 | 69 | ||
Distributor and reseller rebates/commissions | 167 | 158 | ||
Unearned income and other revenue deferrals | 158 | 155 | ||
Other | 259 | 216 | ||
Other Long-term Liabilities | ||||
Other Long-term Liabilities | ||||
Deferred taxes | 37 | 51 | ||
Income taxes payable | 64 | 18 | ||
Operating lease obligation | 260 | |||
Finance lease obligation | 5 | |||
Environmental reserves | 9 | 9 | ||
Restructuring reserves | 0 | 2 | ||
Other | 137 | 189 | ||
Interest rate swaps | Fair Value, Recurring | Level 2 | ||||
Other Long-term Liabilities | ||||
Financial liabilities, fair value | 0 | 3 | ||
Deferred compensation liabilities | Fair Value, Recurring | Level 2 | ||||
Other Long-term Liabilities | ||||
Financial liabilities, fair value | 18 | 16 | ||
Derivatives Designated as Hedging Instruments | Interest rate swaps | Other Long-term Assets | ||||
Other Long-term Assets | ||||
Derivative instruments | $ 1 | $ 0 |
Debt - Short-term Debt (Details
Debt - Short-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Current maturities of long-term debt | $ 1,049 | $ 961 |
Short-term debt and current portion of long-term debt | $ 1,049 | $ 961 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Millions | Mar. 15, 2019 | Dec. 31, 2019 | Mar. 14, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Principal debt balance | $ 4,313 | $ 5,281 | ||
Unamortized discount | (16) | (25) | ||
Debt issuance costs | (17) | (25) | ||
Terminated swaps | 1 | 2 | ||
Current swaps | 1 | (3) | ||
Less: current maturities | (1,049) | (961) | ||
Total Long-term Debt | 3,233 | 4,269 | ||
2020 | 1,051 | |||
2021 | 1,062 | |||
2022 | 300 | |||
2023 | 1,000 | |||
2024 | 300 | |||
Thereafter | 600 | |||
Long-term debt maturities, subsequent year by quarter, first | 0 | |||
Long-term debt maturities, subsequent year by quarter, second | 313 | |||
Long-term debt maturities, subsequent year by quarter, third | 738 | |||
Long-term debt maturities, subsequent year by quarter, fourth | 0 | |||
Senior Notes due 2019 2.75% | ||||
Debt Instrument [Line Items] | ||||
Principal debt balance | 0 | 406 | ||
Senior Notes due 2019 5.63% | ||||
Debt Instrument [Line Items] | ||||
Principal debt balance | $ 0 | 554 | ||
Senior Notes due 2020 2.80% | ||||
Debt Instrument [Line Items] | ||||
Stated Rate (percent) | 2.80% | |||
Debt, weighted average interest rate (percentage) | 2.50% | |||
Principal debt balance | $ 313 | 313 | ||
Senior Notes due 2020 3.50% | ||||
Debt Instrument [Line Items] | ||||
Stated Rate (percent) | 3.50% | |||
Debt, weighted average interest rate (percentage) | 3.47% | |||
Principal debt balance | $ 362 | 362 | ||
Senior Notes due 2020 2.75% | ||||
Debt Instrument [Line Items] | ||||
Stated Rate (percent) | 2.75% | |||
Debt, weighted average interest rate (percentage) | 2.67% | |||
Principal debt balance | $ 376 | 375 | ||
Senior Notes due 2021 4.50% | ||||
Debt Instrument [Line Items] | ||||
Stated Rate (percent) | 4.50% | |||
Debt, weighted average interest rate (percentage) | 4.54% | |||
Principal debt balance | $ 1,062 | 1,062 | ||
Senior Notes due 2022 4.07% | ||||
Debt Instrument [Line Items] | ||||
Stated Rate (percent) | 4.07% | |||
Debt, weighted average interest rate (percentage) | 4.07% | |||
Principal debt balance | $ 300 | 300 | ||
Senior Notes due 2023 4.13% | ||||
Debt Instrument [Line Items] | ||||
Stated Rate (percent) | 4.125% | 4.13% | 3.625% | |
Debt, weighted average interest rate (percentage) | 3.68% | |||
Principal debt balance | $ 1,000 | 1,000 | ||
Increase to coupon rate | 0.50% | |||
Senior Notes due 2024 3.80% | ||||
Debt Instrument [Line Items] | ||||
Stated Rate (percent) | 3.80% | |||
Debt, weighted average interest rate (percentage) | 3.84% | |||
Principal debt balance | $ 300 | 300 | ||
Senior Notes due 2035 4.80% | ||||
Debt Instrument [Line Items] | ||||
Stated Rate (percent) | 4.80% | |||
Debt, weighted average interest rate (percentage) | 4.84% | |||
Principal debt balance | $ 250 | 250 | ||
Senior Notes due 2039 6.75% | ||||
Debt Instrument [Line Items] | ||||
Stated Rate (percent) | 6.75% | |||
Debt, weighted average interest rate (percentage) | 6.78% | |||
Principal debt balance | $ 350 | 350 | ||
Long-term Debt | ||||
Debt Instrument [Line Items] | ||||
Principal debt balance | $ 4,313 | 5,272 | ||
Capital Lease Obligations | ||||
Debt Instrument [Line Items] | ||||
Principal debt balance | $ 9 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Line of Credit Facility [Line Items] | |||
Line of credit facility, fair value of amount outstanding | $ 0 | $ 0 | |
Liens on Brazilian assets | 0 | $ 0 | |
Commercial paper and credit facility maximum borrowing capacity | $ 1,800,000,000 | ||
Commercial paper | $ 0 | ||
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, accordion feature | 750,000,000 | ||
Debt guaranteed by domestic subsidiary | $ 100,000,000 | ||
Line of credit facility, commitment fee (percent) | 0.25% | ||
Revolving Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, interest rate, base rate (percent) | 0.00% | ||
Line of credit facility, interest rate, LIBOR plus all-in spread rate | 1.00% | ||
All-in interest rate spread based on credit rating (percent) | 0.375% | ||
Line of credit facility, commitment fee (percent) | 0.125% | ||
Line of credit facility, covenant terms | 3.00x | ||
Revolving Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, interest rate, base rate (percent) | 0.70% | ||
Line of credit facility, interest rate, LIBOR plus all-in spread rate | 1.70% | ||
All-in interest rate spread based on credit rating (percent) | 1.375% | ||
Line of credit facility, commitment fee (percent) | 0.30% | ||
Line of credit facility, covenant terms | 4.25x | ||
Current Credit Facility | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, current borrowing capacity | $ 1,800,000,000 | ||
Letter of credit, credit facility sub-facility, maximum borrowing amount | 250,000,000 | ||
Previous Credit Facility | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, former borrowing capacity | $ 2,000,000,000 |
Debt - Interest (Details)
Debt - Interest (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Interest paid | $ 221 | $ 231 | $ 268 |
Interest expense | 236 | 244 | 252 |
Interest income | $ 260 | $ 283 | $ 302 |
Financial Instruments - Termina
Financial Instruments - Terminated Swaps (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Amortization of fair value adjustments for terminated swaps | $ 1 | $ 3 | $ 13 |
Unamortized balance of fair value adjustments - terminated swaps | $ 1 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Derivative notional value | $ 1,091 | |
Senior Note 2021 | ||
Derivative [Line Items] | ||
Derivative liability, notional amount | 200 | $ 300 |
Derivative, fair value, net | $ 1 | $ (3) |
Debt, weighted average interest rate (percentage) | 3.35% | |
Debt instrument, interest rate, effective (percent) | 4.50% | |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative notional value, terminated early | $ 100 |
Financial Instruments - Foreign
Financial Instruments - Foreign Exchange Risk Management (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | $ 1,091 | |
Average maturity of foreign exchange hedging contracts - within three months (percent) | 82.00% | |
Average maturity of foreign exchange hedging contracts - within three months and six months (percent) | 9.00% | |
Average maturity of foreign exchange hedging contracts - within six and twelve months (percent) | 9.00% | |
Derivative assets (liabilities), at fair value, net | $ (5) | $ 11 |
Japanese Yen/U.S. Dollar | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 369 | |
Japanese Yen/Euro | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 264 | |
U.S. Dollar/Euro | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 122 | |
Euro/U.S. Dollar | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 71 | |
Euro/U.K. Pound Sterling | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 64 | |
U.S. Dollar/Canadian Dollar | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 50 | |
Euro/Danish Krone | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 29 | |
U.K. Pound Sterling/Euro | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 27 | |
U.S. Dollar/Russian Ruble | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 22 | |
U.S. Dollar/Japanese Yen | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 14 | |
Euro/Swiss Franc | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 12 | |
U.S. Dollar/Israeli Shekel | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 9 | |
All Other | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative notional value | 38 | |
Foreign exchange contract | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | (6) | |
Foreign exchange contract | Japanese Yen/U.S. Dollar | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | (2) | |
Foreign exchange contract | Japanese Yen/Euro | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | (3) | |
Foreign exchange contract | U.S. Dollar/Euro | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | 0 | |
Foreign exchange contract | Euro/U.S. Dollar | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | 0 | |
Foreign exchange contract | Euro/U.K. Pound Sterling | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | 0 | |
Foreign exchange contract | U.S. Dollar/Canadian Dollar | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | (1) | |
Foreign exchange contract | Euro/Danish Krone | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | 0 | |
Foreign exchange contract | U.K. Pound Sterling/Euro | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | 0 | |
Foreign exchange contract | U.S. Dollar/Russian Ruble | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | (1) | |
Foreign exchange contract | U.S. Dollar/Japanese Yen | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | 0 | |
Foreign exchange contract | Euro/Swiss Franc | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | 0 | |
Foreign exchange contract | U.S. Dollar/Israeli Shekel | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | 0 | |
Foreign exchange contract | All Other | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | ||
Derivative, fair value, net | $ 1 |
Financial Instruments - Summary
Financial Instruments - Summary of Derivative Instruments Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net Derivative (Liability) Asset | $ (5) | $ 11 |
Other Assets | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative instruments - assets | 3 | 15 |
Other Liabilities | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative instruments - liabilities | (8) | (4) |
Derivatives Designated as Hedging Instruments | Other Assets | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net Derivative (Liability) Asset | (3) | |
Derivatives Designated as Hedging Instruments | Other Liabilities | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net Derivative (Liability) Asset | 5 | |
Foreign exchange contracts – forwards | Derivatives Designated as Hedging Instruments | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net Derivative (Liability) Asset | (4) | 8 |
Foreign exchange contracts – forwards | Derivatives Designated as Hedging Instruments | Other current assets | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative instruments - assets | 1 | 7 |
Foreign exchange contracts – forwards | Derivatives Designated as Hedging Instruments | Accrued expensed and other current liabilities | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative instruments - liabilities | (5) | 0 |
Foreign exchange contracts – forwards | Derivatives NOT Designated as Hedging Instruments | Other current assets | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative instruments - assets | 1 | 7 |
Foreign exchange contracts – forwards | Derivatives NOT Designated as Hedging Instruments | Accrued expensed and other current liabilities | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative instruments - liabilities | (3) | (1) |
Foreign exchange contracts – forwards | Derivatives NOT Designated as Hedging Instruments | Other Assets | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net Derivative (Liability) Asset | (2) | |
Foreign exchange contracts – forwards | Derivatives NOT Designated as Hedging Instruments | Other Liabilities | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net Derivative (Liability) Asset | 6 | |
Foreign currency options | Derivatives Designated as Hedging Instruments | Other current assets | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative instruments - assets | 0 | 1 |
Interest rate swaps | Derivatives Designated as Hedging Instruments | Other long-term assets | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative instruments - assets | 1 | 0 |
Interest rate swaps | Derivatives Designated as Hedging Instruments | Other long-term liabilities | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative instruments - liabilities | $ 0 | $ 3 |
Financial Instruments - Summa_2
Financial Instruments - Summary of Derivative Instruments Gain (Losses) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Changes in fair value of cash flow hedges gains (losses), pre-tax | $ 2,000,000 | $ 9,000,000 | $ (28,000,000) |
Other unrealized (losses) gains, net | (2,000,000) | 4,000,000 | (12,000,000) |
Foreign currency transaction gain (loss), before tax | 7,000,000 | (5,000,000) | (4,000,000) |
Cash Flow Hedging | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, gain (loss) on derivative, net | 0 | 0 | 0 |
Cash Flow Hedging | Foreign currency gain (loss) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, gain (loss) on derivative, net | 0 | ||
Underlying Derivative Exposure | Cash Flow Hedging | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, gain (loss) on derivative, net | 0 | 0 | 0 |
Interest Rate Contract | Fair Value Hedging | Interest expense | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, gain (loss) on derivative, net | 4,000,000 | (3,000,000) | (3,000,000) |
Hedged item gain (loss) recognized in income | (4,000,000) | 3,000,000 | 3,000,000 |
Foreign exchange contracts – forwards | Cash Flow Hedging | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Changes in fair value of cash flow hedges gains (losses), pre-tax | 2,000,000 | 9,000,000 | (28,000,000) |
Foreign exchange contracts – forwards | Cash Flow Hedging | Cost of sales | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) reclassified from AOCI to income | 9,000,000 | (14,000,000) | (35,000,000) |
Foreign exchange contracts – forwards | Derivatives NOT Designated as Hedging Instruments | Foreign currency gain (loss) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, gain (loss) on derivative, net | $ 6,000,000 | $ (21,000,000) | $ 44,000,000 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Recurring (Details) - Fair Value, Recurring - Significant Other Observable Inputs (Level 2) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Total | $ 22 | $ 31 |
Liabilities: | ||
Total | 26 | 20 |
Options Held | ||
Assets: | ||
Foreign currency options | 0 | 1 |
Foreign exchange contracts – forwards | ||
Assets: | ||
Total | 2 | 14 |
Liabilities: | ||
Total | 8 | 1 |
Interest rate swaps | ||
Assets: | ||
Total | 1 | 0 |
Liabilities: | ||
Total | 0 | 3 |
Deferred compensation | ||
Assets: | ||
Total | 19 | 16 |
Liabilities: | ||
Total | $ 18 | $ 16 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Nonrecurring (Details) - Fair Value, Nonrecurring - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 2,740 | $ 1,081 |
Accounts receivable, net | 1,236 | 1,270 |
Short-term debt and current portion of long-term debt | 1,049 | 961 |
Long-term debt | 3,233 | 4,269 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 2,740 | 1,081 |
Accounts receivable, net | 1,236 | 1,270 |
Short-term debt and current portion of long-term debt | 1,054 | 966 |
Long-term debt | $ 3,331 | $ 3,922 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amounts Recognized in the Consolidated Balance Sheets: | |||
Pension and other benefit liabilities | $ (1,707) | $ (1,482) | |
Post-retirement medical benefits | (352) | (350) | |
Pension Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation - ending | 10,090 | ||
Change in Plan Assets: | |||
Fair value of plan assets -beginning | 8,087 | ||
Employer contributions | 141 | ||
Fair value of plan assets - ending | 8,878 | 8,087 | |
Net Funded Status | (1,212) | ||
Other Postretirement Benefits Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation - beginning | 385 | 723 | |
Service cost | 2 | 4 | $ 5 |
Interest cost | 15 | 23 | 28 |
Plan participants' contributions | 10 | 3 | |
Actuarial loss (gain) | 8 | (63) | |
Currency exchange rate changes | 5 | (11) | |
Plan Amendments/Curtailments | 0 | (234) | |
Benefits paid/settlements | (40) | (60) | |
Other | 0 | 0 | |
Benefit obligation - ending | 385 | 385 | 723 |
Change in Plan Assets: | |||
Fair value of plan assets -beginning | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 30 | 57 | |
Plan participants' contributions | 10 | 3 | |
Currency exchange rate changes | 0 | 0 | |
Benefits paid/settlements | (40) | (60) | |
Other | 0 | 0 | |
Fair value of plan assets - ending | 0 | 0 | 0 |
Net Funded Status | (385) | (385) | |
Amounts Recognized in the Consolidated Balance Sheets: | |||
Other long-term assets | 0 | 0 | |
Accrued compensation and benefit costs | (33) | (35) | |
Pension and other benefit liabilities | 0 | 0 | |
Post-retirement medical benefits | (352) | (350) | |
Net Amounts Recognized | (385) | (385) | |
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | |||
Net actuarial loss (gain) | (29) | (42) | |
Prior service (credit) cost | (164) | (240) | |
Total Pre-tax loss (gain) | (193) | (282) | |
United States | Pension Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation - beginning | 3,234 | 4,180 | |
Service cost | 2 | 2 | 2 |
Interest cost | 218 | 63 | 226 |
Plan participants' contributions | 0 | 0 | |
Actuarial loss (gain) | 564 | (288) | |
Currency exchange rate changes | 0 | 0 | |
Plan Amendments/Curtailments | 0 | 0 | |
Benefits paid/settlements | (420) | (723) | |
Other | 0 | 0 | |
Benefit obligation - ending | 3,598 | 3,234 | 4,180 |
Change in Plan Assets: | |||
Fair value of plan assets -beginning | 2,358 | 3,224 | |
Actual return on plan assets | 529 | (170) | |
Employer contributions | 26 | 27 | |
Plan participants' contributions | 0 | 0 | |
Currency exchange rate changes | 0 | 0 | |
Benefits paid/settlements | (420) | (723) | |
Other | 0 | 0 | |
Fair value of plan assets - ending | 2,493 | 2,358 | 3,224 |
Net Funded Status | (1,105) | (876) | |
Amounts Recognized in the Consolidated Balance Sheets: | |||
Other long-term assets | 0 | 0 | |
Accrued compensation and benefit costs | (25) | (25) | |
Pension and other benefit liabilities | (1,080) | (851) | |
Post-retirement medical benefits | 0 | 0 | |
Net Amounts Recognized | (1,105) | (876) | |
Accumulated Benefit Obligation | 3,598 | 3,234 | |
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | |||
Net actuarial loss (gain) | 1,059 | 933 | |
Prior service (credit) cost | (3) | (5) | |
Total Pre-tax loss (gain) | 1,056 | 928 | |
Foreign Plan | Pension Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation - beginning | 6,007 | 6,703 | |
Service cost | 22 | 27 | 29 |
Interest cost | 153 | 149 | 158 |
Plan participants' contributions | 3 | 4 | |
Actuarial loss (gain) | 472 | (293) | |
Currency exchange rate changes | 114 | (339) | |
Plan Amendments/Curtailments | (2) | 41 | |
Benefits paid/settlements | (270) | (281) | |
Other | (7) | (4) | |
Benefit obligation - ending | 6,492 | 6,007 | 6,703 |
Change in Plan Assets: | |||
Fair value of plan assets -beginning | 5,729 | 6,308 | |
Actual return on plan assets | 680 | (85) | |
Employer contributions | 115 | 117 | |
Plan participants' contributions | 3 | 4 | |
Currency exchange rate changes | 135 | (329) | |
Benefits paid/settlements | (270) | (281) | |
Other | (7) | (5) | |
Fair value of plan assets - ending | 6,385 | 5,729 | $ 6,308 |
Net Funded Status | (107) | (278) | |
Amounts Recognized in the Consolidated Balance Sheets: | |||
Other long-term assets | 451 | 281 | |
Accrued compensation and benefit costs | (22) | (24) | |
Pension and other benefit liabilities | (536) | (535) | |
Post-retirement medical benefits | 0 | 0 | |
Net Amounts Recognized | (107) | (278) | |
Accumulated Benefit Obligation | 6,326 | 5,847 | |
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | |||
Net actuarial loss (gain) | 1,462 | 1,457 | |
Prior service (credit) cost | 22 | 19 | |
Total Pre-tax loss (gain) | $ 1,484 | $ 1,476 |
Employee Benefit Plans - Accumu
Employee Benefit Plans - Accumulated Benefit Obligation in Excess of Plan Assets (Details) - Pension Plan - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated Benefit Obligation | $ 4,834 | $ 4,393 | |
Fair Value of Plan Assets | 3,190 | 2,982 | |
Benefit Obligation | 4,857 | 4,578 | |
Fair Value of Plan Assets | 3,190 | 3,140 | |
Fair Value of Pension Plan Assets | 8,878 | 8,087 | |
Pension Benefit Obligations | 10,090 | ||
Net Funded Status | (1,212) | ||
United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated Benefit Obligation | 3,598 | 3,234 | |
Fair Value of Plan Assets | 2,493 | 2,358 | |
Benefit Obligation | 3,598 | 3,234 | |
Fair Value of Plan Assets | 2,493 | 2,358 | |
Fair Value of Pension Plan Assets | 2,493 | 2,358 | $ 3,224 |
Pension Benefit Obligations | 3,598 | 3,234 | 4,180 |
Net Funded Status | (1,105) | (876) | |
Foreign Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated Benefit Obligation | 1,236 | 1,159 | |
Fair Value of Plan Assets | 697 | 624 | |
Benefit Obligation | 1,259 | 1,344 | |
Fair Value of Plan Assets | 697 | 782 | |
Fair Value of Pension Plan Assets | 6,385 | 5,729 | 6,308 |
Pension Benefit Obligations | 6,492 | 6,007 | $ 6,703 |
Net Funded Status | (107) | (278) | |
U.K. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Pension Plan Assets | 4,169 | ||
Pension Benefit Obligations | 3,798 | ||
Net Funded Status | 371 | ||
Netherlands | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Pension Plan Assets | 1,083 | ||
Pension Benefit Obligations | 1,101 | ||
Net Funded Status | (18) | ||
Canada | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Pension Plan Assets | 721 | ||
Pension Benefit Obligations | 738 | ||
Net Funded Status | (17) | ||
Germany | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Pension Plan Assets | 0 | ||
Pension Benefit Obligations | 367 | ||
Net Funded Status | (367) | ||
Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Pension Plan Assets | 412 | ||
Pension Benefit Obligations | 488 | ||
Net Funded Status | (76) | ||
Underfunded Plan | United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated Benefit Obligation | 3,261 | 2,918 | |
Fair Value of Plan Assets | 2,493 | 2,358 | |
Benefit Obligation | 3,261 | 2,918 | |
Fair Value of Plan Assets | 2,493 | 2,358 | |
Underfunded Plan | Foreign Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated Benefit Obligation | 767 | 713 | |
Fair Value of Plan Assets | 697 | 624 | |
Benefit Obligation | 780 | 888 | |
Fair Value of Plan Assets | 697 | 782 | |
Unfunded Plan | United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated Benefit Obligation | 337 | 316 | |
Fair Value of Plan Assets | 0 | 0 | |
Benefit Obligation | 337 | 316 | |
Fair Value of Plan Assets | 0 | 0 | |
Fair Value of Pension Plan Assets | 0 | ||
Pension Benefit Obligations | 337 | ||
Net Funded Status | (337) | ||
Unfunded Plan | Foreign Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated Benefit Obligation | 469 | 446 | |
Fair Value of Plan Assets | 0 | 0 | |
Benefit Obligation | 479 | 456 | |
Fair Value of Plan Assets | 0 | $ 0 | |
Funded Plan | United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair Value of Pension Plan Assets | 2,493 | ||
Pension Benefit Obligations | 3,261 | ||
Net Funded Status | $ (768) |
Employee Benefit Plans - Total
Employee Benefit Plans - Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined Benefit Plans | $ 109 | $ 175 | $ 194 |
Net actuarial (gain) loss | (275) | 273 | 52 |
Amortization of net actuarial (loss) gain | (156) | (252) | (236) |
Amortization of net prior service credit | (81) | (26) | (10) |
Total Recognized in Other Comprehensive Income | 65 | (540) | (169) |
Interest expense on non-TRA obligations | 243 | 258 | 257 |
Interest (income) expense allocated to TRA participant accounts | 128 | (46) | 127 |
Expected Investment Income on Non-TRA Assets | 315 | 357 | 321 |
Actual investment (loss) income on TRA assets | 128 | (46) | 127 |
Other Postretirement Benefits Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 2 | 4 | 5 |
Interest cost | 15 | 23 | 28 |
Expected return on plan assets | 0 | 0 | 0 |
Recognized net actuarial loss (gain) | (5) | 0 | 1 |
Amortization of prior service credit | (77) | (19) | (4) |
Recognized settlement loss | 0 | 0 | 0 |
Recognized curtailment gain | 0 | 0 | 0 |
Defined Benefit Plans | (65) | 8 | 30 |
Net Periodic Benefit Cost (Credit) | (65) | 8 | 30 |
Net actuarial (gain) loss | 8 | (63) | (16) |
Prior service cost (credit) | 0 | (234) | 0 |
Amortization of net actuarial (loss) gain | 5 | 0 | (1) |
Amortization of net prior service credit | 77 | 19 | 4 |
Curtailment gain | 0 | 0 | 0 |
Total Recognized in Other Comprehensive Income | 90 | (278) | (13) |
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income | 25 | (270) | 17 |
United States | Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 2 | 2 | 2 |
Interest cost | 218 | 63 | 226 |
Expected return on plan assets | (210) | (67) | (227) |
Recognized net actuarial loss (gain) | 24 | 22 | 21 |
Amortization of prior service credit | (2) | (2) | (2) |
Recognized settlement loss | 93 | 173 | 133 |
Recognized curtailment gain | 0 | 0 | 0 |
Defined Benefit Plans | 125 | 191 | 153 |
Defined contribution plans | 26 | 37 | 38 |
Net Periodic Benefit Cost (Credit) | 151 | 228 | 191 |
Net actuarial (gain) loss | 243 | (50) | 238 |
Prior service cost (credit) | 0 | 0 | 0 |
Amortization of net actuarial (loss) gain | (117) | (195) | (154) |
Amortization of net prior service credit | 2 | 2 | 2 |
Curtailment gain | 0 | 0 | 0 |
Total Recognized in Other Comprehensive Income | 128 | (243) | 86 |
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income | 279 | (15) | 277 |
Foreign Plan | Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 22 | 27 | 29 |
Interest cost | 153 | 149 | 158 |
Expected return on plan assets | (233) | (244) | (221) |
Recognized net actuarial loss (gain) | 43 | 56 | 79 |
Amortization of prior service credit | (2) | (4) | (4) |
Recognized settlement loss | 1 | 1 | 2 |
Recognized curtailment gain | 0 | (1) | (2) |
Defined Benefit Plans | (16) | (16) | 41 |
Defined contribution plans | 23 | 29 | 29 |
Net Periodic Benefit Cost (Credit) | 7 | 13 | 70 |
Net actuarial (gain) loss | 24 | 33 | (273) |
Prior service cost (credit) | 0 | 41 | (1) |
Amortization of net actuarial (loss) gain | (44) | (57) | (81) |
Amortization of net prior service credit | 2 | 4 | 4 |
Curtailment gain | 0 | 1 | 0 |
Total Recognized in Other Comprehensive Income | (18) | 22 | (351) |
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income | $ (11) | 35 | $ (281) |
United States of America, Dollars | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Out-of-period adjustment, gross | $ (53) |
Employee Benefit Plans - Plan A
Employee Benefit Plans - Plan Amendments (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Pension Plan | U.K. | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Cost of equalization, percent of defined benefit plan obligation (percent) | 1.20% |
Amortization to prior service cost, period (years) | 24 years |
Annual amortization to prior service cost | $ 2 |
Pension Plan | U.K. | United Kingdom, Pounds | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Cost of equalization | 33 |
Pension Plan | United States | United States of America, Dollars | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Cost of equalization | 42 |
Other Postretirement Benefits Plan | Canada | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Accumulated benefit obligation, increase (decrease) for plan amendment | (19) |
Other Postretirement Benefits Plan | United States | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Accumulated benefit obligation, increase (decrease) for plan amendment | 283 |
Benefit obligation, increase (decrease) for plan amendment | 216 |
Actuarial gain, increase (decrease) for plan amendment | $ 67 |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Benefit Plans Assets Measured at Fair Value (Details) - Pension Plan - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 8,878 | $ 8,087 | |
Assets measured at NAV | Mutual Fund | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 76 | ||
U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 2,493 | $ 2,358 | $ 3,224 |
Defined benefit plan, plan assets, allocation (percent) | 100.00% | 100.00% | |
U.S. | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 9 | $ 1 | |
U.S. | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 221 | 117 | |
U.S. | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 384 | 149 | |
U.S. | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 316 | 248 | |
U.S. | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 67 | 81 | |
U.S. | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 1,119 | 1,363 | |
U.S. | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 45 | (26) | |
U.S. | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 15 | $ 28 | |
Defined benefit plan, plan assets, allocation (percent) | 6.00% | 3.00% | |
U.S. | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 199 | $ 353 | |
Defined benefit plan, plan assets, allocation (percent) | 8.00% | 6.00% | |
U.S. | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 0 | $ 0 | |
U.S. | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 118 | $ 44 | |
Defined benefit plan, plan assets, allocation (percent) | 2.00% | 6.00% | |
U.S. | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 348 | $ 211 | |
U.S. | Level 1 | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 9 | 1 | |
U.S. | Level 1 | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 182 | 82 | |
U.S. | Level 1 | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 193 | 97 | |
U.S. | Level 1 | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 1 | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 1 | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 1 | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 1 | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 19 | |
U.S. | Level 1 | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 1 | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 1 | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | (36) | 12 | |
Plan assets, non-financial, amount | (36) | 12 | |
U.S. | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 1,547 | 1,666 | |
U.S. | Level 2 | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 2 | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 2 | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 2 | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 316 | 248 | |
U.S. | Level 2 | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 67 | 81 | |
U.S. | Level 2 | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 1,119 | 1,363 | |
U.S. | Level 2 | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 45 | (26) | |
U.S. | Level 2 | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 2 | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 2 | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 2 | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 5 | 0 | |
U.S. | Level 3 | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 5 | 0 | 0 |
U.S. | Level 3 | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Level 3 | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Assets measured at NAV | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 593 | 481 | |
U.S. | Assets measured at NAV | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Assets measured at NAV | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 39 | 35 | |
U.S. | Assets measured at NAV | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 191 | 52 | |
U.S. | Assets measured at NAV | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Assets measured at NAV | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Assets measured at NAV | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Assets measured at NAV | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Assets measured at NAV | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 10 | 9 | |
U.S. | Assets measured at NAV | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 199 | 353 | |
U.S. | Assets measured at NAV | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
U.S. | Assets measured at NAV | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 154 | 32 | |
Foreign Plan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 6,385 | $ 5,729 | 6,308 |
Defined benefit plan, plan assets, allocation (percent) | 100.00% | 100.00% | |
Foreign Plan | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 421 | $ 370 | |
Foreign Plan | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 184 | 145 | |
Foreign Plan | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 882 | 582 | |
Foreign Plan | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 47 | 57 | |
Foreign Plan | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 1,825 | 1,861 | |
Foreign Plan | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 841 | 736 | |
Foreign Plan | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 186 | 99 | |
Foreign Plan | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 335 | $ 367 | |
Defined benefit plan, plan assets, allocation (percent) | 5.00% | 6.00% | |
Foreign Plan | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 1,532 | $ 1,392 | |
Defined benefit plan, plan assets, allocation (percent) | 24.00% | 24.00% | |
Foreign Plan | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 90 | $ 92 | |
Foreign Plan | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 42 | $ 28 | |
Defined benefit plan, plan assets, allocation (percent) | 11.00% | 11.00% | |
Foreign Plan | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 1,026 | $ 837 | |
Foreign Plan | Level 1 | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 421 | 370 | |
Foreign Plan | Level 1 | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 132 | 103 | |
Foreign Plan | Level 1 | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 462 | 359 | |
Foreign Plan | Level 1 | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 1 | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 1 | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 1 | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 1 | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 1 | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 1 | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 1 | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 11 | 5 | |
Plan assets, non-financial, amount | 11 | 5 | |
Foreign Plan | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 3,284 | 2,929 | |
Foreign Plan | Level 2 | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 2 | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 52 | 42 | |
Foreign Plan | Level 2 | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 302 | 111 | |
Foreign Plan | Level 2 | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 47 | 57 | |
Foreign Plan | Level 2 | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 1,825 | 1,861 | |
Foreign Plan | Level 2 | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 841 | 736 | |
Foreign Plan | Level 2 | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 186 | 99 | |
Foreign Plan | Level 2 | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 2 | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 2 | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 2 | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 31 | 23 | |
Foreign Plan | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 314 | 308 | 244 |
Foreign Plan | Level 3 | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 3 | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 3 | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 3 | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 3 | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 3 | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 3 | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Level 3 | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 219 | 210 | 137 |
Foreign Plan | Level 3 | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 5 | 6 | |
Foreign Plan | Level 3 | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 90 | 92 | $ 100 |
Foreign Plan | Level 3 | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Assets measured at NAV | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 1,761 | 1,655 | |
Foreign Plan | Assets measured at NAV | Cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Assets measured at NAV | U.S. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Assets measured at NAV | International | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 118 | 112 | |
Foreign Plan | Assets measured at NAV | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Assets measured at NAV | Debt security issued by government agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Assets measured at NAV | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Assets measured at NAV | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Assets measured at NAV | Real estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 116 | 157 | |
Foreign Plan | Assets measured at NAV | Private equity/venture capital | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 1,527 | 1,386 | |
Foreign Plan | Assets measured at NAV | Guaranteed insurance contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | 0 | 0 | |
Foreign Plan | Assets measured at NAV | Other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Plan assets, amount | $ 0 | $ 0 | |
Fixed Income Securities | Assets measured at NAV | Mutual Fund | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Defined benefit plan, plan assets, allocation (percent) | 75.00% | ||
Equity Securities | Assets measured at NAV | Mutual Fund | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Defined benefit plan, plan assets, allocation (percent) | 25.00% |
Employee Benefit Plans - Defi_2
Employee Benefit Plans - Defined Benefit Plans Measured Using Significant Unobservable Inputs Level 3 (Details) - Pension Plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | $ 8,087 | |
Fair value of plan assets - ending | 8,878 | $ 8,087 |
U.S. | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 2,358 | 3,224 |
Fair value of plan assets - ending | 2,493 | 2,358 |
U.S. | Real estate | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 28 | |
Fair value of plan assets - ending | 15 | 28 |
U.S. | Guaranteed insurance contracts | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 0 | |
Fair value of plan assets - ending | 0 | 0 |
U.S. | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 0 | |
Fair value of plan assets - ending | 5 | 0 |
U.S. | Level 3 | Real estate | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 0 | 0 |
Purchases | 5 | 0 |
Sales | 0 | 0 |
Realized losses | (4) | |
Unrealized gains | 0 | 4 |
Currency translation | 0 | 0 |
Fair value of plan assets - ending | 5 | 0 |
U.S. | Level 3 | Guaranteed insurance contracts | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 0 | |
Fair value of plan assets - ending | 0 | 0 |
Foreign Plan | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 5,729 | 6,308 |
Fair value of plan assets - ending | 6,385 | 5,729 |
Foreign Plan | Real estate | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 367 | |
Fair value of plan assets - ending | 335 | 367 |
Foreign Plan | Guaranteed insurance contracts | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 92 | |
Fair value of plan assets - ending | 90 | 92 |
Foreign Plan | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 308 | 244 |
Purchases | 2 | 23 |
Sales | (9) | (7) |
Realized losses | 0 | |
Unrealized gains | 15 | 58 |
Currency translation | (2) | (10) |
Fair value of plan assets - ending | 314 | 308 |
Foreign Plan | Level 3 | Real estate | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 210 | 137 |
Purchases | 0 | 22 |
Sales | 0 | (1) |
Realized losses | 0 | |
Unrealized gains | 9 | 62 |
Currency translation | 0 | (10) |
Fair value of plan assets - ending | 219 | 210 |
Foreign Plan | Level 3 | Private equity funds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 6 | 7 |
Purchases | 0 | 0 |
Sales | (5) | 0 |
Realized losses | 0 | |
Unrealized gains | 4 | (4) |
Currency translation | 0 | 3 |
Fair value of plan assets - ending | 5 | 6 |
Foreign Plan | Level 3 | Guaranteed insurance contracts | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of plan assets -beginning | 92 | 100 |
Purchases | 2 | 1 |
Sales | (4) | (6) |
Realized losses | 0 | |
Unrealized gains | 2 | 0 |
Currency translation | (2) | (3) |
Fair value of plan assets - ending | $ 90 | $ 92 |
Employee Benefit Plans - Invest
Employee Benefit Plans - Investment Strategy (Details) - Pension Plan | Dec. 31, 2019 | Dec. 31, 2018 |
U.S. | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 100.00% | 100.00% |
Foreign Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 100.00% | 100.00% |
Equity investments | U.S. | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 23.00% | 12.00% |
Equity investments | Foreign Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 14.00% | 13.00% |
Fixed income investments | U.S. | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 61.00% | 73.00% |
Fixed income investments | Foreign Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 46.00% | 46.00% |
Real estate | U.S. | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 6.00% | 3.00% |
Real estate | Foreign Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 5.00% | 6.00% |
Private equity/venture capital | U.S. | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 8.00% | 6.00% |
Private equity/venture capital | Foreign Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 24.00% | 24.00% |
Other | U.S. | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 2.00% | 6.00% |
Other | Foreign Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, plan assets, allocation (percent) | 11.00% | 11.00% |
Employee Benefit Plans - Contri
Employee Benefit Plans - Contributions and Assumptions (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Employer discretionary contribution | $ 49 | $ 66 | $ 67 | |
Pension Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Employer contributions | 141 | |||
Expected future employer contribution, next fiscal year | 135 | |||
2020 | 746 | |||
2021 | 534 | |||
2022 | 546 | |||
2023 | 555 | |||
2024 | 553 | |||
Years 2025-2029 | 2,724 | |||
Other Postretirement Benefits Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Employer contributions | 30 | $ 57 | ||
Expected future employer contribution, next fiscal year | 35 | |||
2020 | 35 | |||
2021 | 32 | |||
2022 | 31 | |||
2023 | 29 | |||
2024 | 28 | |||
Years 2025-2029 | $ 118 | |||
Discount rate assumptions used to determine benefit obligations (percent) | 3.00% | 4.10% | 3.50% | |
Discount rate assumptions used to determine net periodic benefit costs (percent) | 4.10% | 3.50% | 3.90% | |
Health care cost trend rate assumed for next year (percent) | 6.00% | 6.30% | ||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)(percent) | 4.30% | 4.70% | ||
Other Postretirement Benefits Plan | Forecasted | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Discount rate assumptions used to determine net periodic benefit costs (percent) | 3.00% | |||
U.S. | Pension Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Employer contributions | $ 26 | $ 27 | ||
Expected future employer contribution, next fiscal year | 25 | |||
2020 | 480 | |||
2021 | 262 | |||
2022 | 269 | |||
2023 | 272 | |||
2024 | 264 | |||
Years 2025-2029 | $ 1,198 | |||
Discount rate assumptions used to determine benefit obligations (percent) | 3.10% | 4.20% | 3.60% | |
Rate of compensation increase assumptions used to determine benefit obligation (percent) | 0.20% | 0.20% | 0.20% | |
Interest crediting rate used to determine benefit obligation (percent) | 2.80% | 2.80% | 2.80% | |
Discount rate assumptions used to determine net periodic benefit costs (percent) | 4.20% | 3.60% | 4.00% | |
Expected return on plan assets assumptions used to determine net periodic benefit cost (percent) | 6.00% | 5.80% | 7.00% | |
Rate of compensation increase assumptions used to determine net periodic benefit cost (percent) | 0.20% | 0.20% | 0.20% | |
Interest crediting rate used to determine net periodic benefit cost (percent) | 2.80% | 2.80% | 2.80% | |
U.S. | Pension Plan | Forecasted | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Discount rate assumptions used to determine net periodic benefit costs (percent) | 3.10% | |||
Expected return on plan assets assumptions used to determine net periodic benefit cost (percent) | 6.00% | |||
Rate of compensation increase assumptions used to determine net periodic benefit cost (percent) | 0.20% | |||
Interest crediting rate used to determine net periodic benefit cost (percent) | 2.80% | |||
U.S. | Pension Plan | Qualified Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Employer contributions | $ 0 | |||
Expected future employer contribution, next fiscal year | 0 | |||
Foreign Plan | Pension Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Employer contributions | 115 | $ 117 | ||
Expected future employer contribution, next fiscal year | 110 | |||
2020 | 266 | |||
2021 | 272 | |||
2022 | 277 | |||
2023 | 283 | |||
2024 | 289 | |||
Years 2025-2029 | $ 1,526 | |||
Discount rate assumptions used to determine benefit obligations (percent) | 1.80% | 2.60% | 2.30% | |
Rate of compensation increase assumptions used to determine benefit obligation (percent) | 2.60% | 2.60% | 2.60% | |
Interest crediting rate used to determine benefit obligation (percent) | 1.50% | 1.50% | 1.50% | |
Discount rate assumptions used to determine net periodic benefit costs (percent) | 2.60% | 2.30% | 2.50% | |
Expected return on plan assets assumptions used to determine net periodic benefit cost (percent) | 4.00% | 3.80% | 4.10% | |
Rate of compensation increase assumptions used to determine net periodic benefit cost (percent) | 2.60% | 2.60% | 2.60% | |
Interest crediting rate used to determine net periodic benefit cost (percent) | 1.50% | 1.50% | 1.50% | |
Foreign Plan | Pension Plan | Forecasted | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Discount rate assumptions used to determine net periodic benefit costs (percent) | 1.80% | |||
Expected return on plan assets assumptions used to determine net periodic benefit cost (percent) | 3.30% | |||
Rate of compensation increase assumptions used to determine net periodic benefit cost (percent) | 2.60% | |||
Interest crediting rate used to determine net periodic benefit cost (percent) | 1.50% |
Income and Other Taxes (Details
Income and Other Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic income | $ 679 | $ 331 | $ 354 |
Foreign income | 143 | 218 | 171 |
Income before Income Taxes and Equity Income | $ 822 | $ 549 | $ 525 |
Income and Other Taxes - Income
Income and Other Taxes - Income Tax Expense (Benefit), Current Deferred, by Jurisdiction (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current Federal Tax Expense (Benefit) | $ (3) | $ 37 | $ (12) |
Deferred Federal Income Tax Expense (Benefit) | 98 | 83 | 411 |
Current Foreign Tax Expense | 43 | 46 | 62 |
Deferred Foreign Income Tax Expense (Benefit) | 5 | 57 | (21) |
Current State Tax Expense | 15 | 29 | 19 |
Deferred State Income Tax (Benefit) Expense | 21 | (5) | 9 |
Income Tax Expense | $ 179 | $ 247 | $ 468 |
Income and Other Taxes - Reconc
Income and Other Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 21.00% | 21.00% | 35.00% |
Nondeductible expenses | 1.30% | 3.70% | 1.30% |
Effect of tax law changes | (4.60%) | 14.50% | 76.20% |
Change in valuation allowance for deferred tax assets | 2.00% | 0.60% | 1.10% |
State taxes, net of federal benefit | 3.50% | 2.30% | 3.60% |
Audit and other tax return adjustments | 0.60% | (1.80%) | (9.40%) |
Tax-exempt income, credits and incentives | (2.10%) | (2.20%) | (3.20%) |
Foreign rate differential adjusted for U.S. taxation of foreign profits | 0.10% | 4.80% | (16.50%) |
Other | 0.00% | 2.10% | 1.00% |
Effective Income Tax Rate | 21.80% | 45.00% | 89.10% |
Income Taxes Paid | $ 94 | $ 80 | $ 84 |
Income and Other Taxes - Alloca
Income and Other Taxes - Allocation of Income Tax Expense Benefit (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Interperiod Allocaion [Line Items] | |||
Pre-tax income | $ 179 | $ 247 | $ 468 |
Discontinued operations | 95 | 10 | 1 |
Retained Earnings | 0 | 36 | 0 |
Total Income Tax Expense | 226 | 420 | 538 |
Changes in defined benefit plans | |||
Income Tax Interperiod Allocaion [Line Items] | |||
Other comprehensive income (loss), tax | (55) | 131 | 63 |
Cash flow hedges | |||
Income Tax Interperiod Allocaion [Line Items] | |||
Other comprehensive income (loss), tax | (1) | 5 | 5 |
Translation adjustments | |||
Income Tax Interperiod Allocaion [Line Items] | |||
Other comprehensive income (loss), tax | $ 8 | $ (9) | $ 1 |
Income and Other Taxes - Unreco
Income and Other Taxes - Unrecognized Tax Benefits Rollforward (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance, Beginning | $ 108 | $ 125 | $ 165 |
Additions related to current year | 42 | 2 | 1 |
Additions related to prior years positions | 17 | 3 | 10 |
Reductions related to prior years positions | (36) | (13) | (46) |
Settlements with taxing authorities | (1) | (6) | (5) |
Reductions related to lapse of statute of limitations | (3) | (3) | (3) |
Currency | 0 | 0 | 3 |
Balance, Ending | 127 | 108 | 125 |
Tax positions, highly certain of realizability but with uncertainty of timing | 3 | 8 | 8 |
Accruals for payment of interest and penalties | $ 2 | $ 2 | $ 5 |
Income and Other Taxes - Deferr
Income and Other Taxes - Deferred Tax Asset and Liability (Details) - USD ($) $ in Millions | 12 Months Ended | 36 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 1986 | |
Deferred Tax Assets And Liabilities [Line Items] | |||||
Research and development | $ 143 | $ 252 | $ 143 | ||
Post-retirement medical benefits | 98 | 99 | 98 | ||
Net operating losses | 389 | 389 | 389 | ||
Operating reserves, accruals and deferrals | 95 | 138 | 95 | ||
Tax credit carryforwards | 239 | 254 | 239 | ||
Deferred and share-based compensation | 26 | 32 | 26 | ||
Pension | 298 | 266 | 298 | ||
Depreciation | 9 | 90 | 9 | ||
Operating lease liabilities | 347 | 347 | |||
Other | 62 | 46 | 62 | ||
Subtotal | 1,706 | 1,566 | 1,706 | ||
Valuation allowance | (399) | (397) | (399) | ||
Total | 1,307 | 1,169 | 1,307 | ||
Finance lease and installment sales | 243 | 291 | 243 | ||
Intangibles and goodwill | 128 | 129 | 128 | ||
Unremitted earnings of foreign subsidiaries | 39 | 59 | 39 | ||
Operating lease ROU assets | 319 | 319 | |||
Other | 17 | 1 | 17 | ||
Total | 746 | 480 | 746 | ||
Total Deferred Taxes, Net | 561 | 689 | 561 | ||
Deferred tax assets | 598 | 740 | 598 | ||
Valuation allowance, increase (decrease) in amount | 2 | (38) | $ 19 | ||
Tax credit carryforwards | 239 | 239 | |||
Carryforwards with no expiration | |||||
Deferred Tax Assets And Liabilities [Line Items] | |||||
Tax credit carryforwards | 1 | 1 | |||
Deferred tax assets, operating loss carryforwards, not subject to expiration | 1,700 | 1,700 | |||
Carryforwards that expire | |||||
Deferred Tax Assets And Liabilities [Line Items] | |||||
Tax credit carryforwards | 238 | 238 | |||
Operating loss carryforwards | 522 | 522 | |||
Other long-term liabilities | |||||
Deferred Tax Assets And Liabilities [Line Items] | |||||
Deferred tax liabilities | (37) | (51) | (37) | ||
Accounting Standards Update 2018-05 | |||||
Deferred Tax Assets And Liabilities [Line Items] | |||||
Tax cuts and jobs act, incomplete accounting, provisional income tax expense (benefit) | $ (35) | 89 | $ 400 | 454 | |
Statutory income tax rate, inclusive of state taxes | 25.00% | ||||
Undistributed Earnings of Foreign Subsidiaries | 1,500 | $ 350 | |||
Accounting Standards Update 2018-05 | Deemed repatriation tax | |||||
Deferred Tax Assets And Liabilities [Line Items] | |||||
Tax cuts and jobs act, incomplete accounting, provisional income tax expense (benefit) | $ 164 | ||||
Accounting Standards Update 2018-05 | Other tax liabilities and adjustments | |||||
Deferred Tax Assets And Liabilities [Line Items] | |||||
Tax cuts and jobs act, incomplete accounting, provisional income tax expense (benefit) | 99 | ||||
Accounting Standards Update 2018-05 | Deferred tax asset | |||||
Deferred Tax Assets And Liabilities [Line Items] | |||||
Tax cuts and jobs act, incomplete accounting, provisional income tax expense (benefit) | 191 | ||||
Xerox Corporation | |||||
Deferred Tax Assets And Liabilities [Line Items] | |||||
Deferred tax assets | $ 598 | $ 740 | $ 598 |
Contingencies and Litigation -
Contingencies and Litigation - Brazil Contingencies (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Loss Contingencies [Line Items] | ||
Liens on Brazilian assets | $ 0 | $ 0 |
Brazil Contingencies | ||
Loss Contingencies [Line Items] | ||
Tax contingency - unreserved | 442,000,000 | 500,000,000 |
Escrow cash deposits | 51,000,000 | 58,000,000 |
Surety bonds | 135,000,000 | 106,000,000 |
Letters of credit | 91,000,000 | 104,000,000 |
Liens on Brazilian assets | $ 0 | $ 0 |
Contingencies and Litigation _2
Contingencies and Litigation - Narrative (Details) $ in Millions | Dec. 13, 2019USD ($) | Feb. 28, 2018complaintclass_action | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 18, 2018USD ($) |
Loss Contingencies [Line Items] | ||||||
Product warranty expense | $ 12 | $ 14 | $ 15 | |||
Product warranty accrual | 7 | $ 6 | ||||
Pending Litigation | Transactions to Combine Xerox and Fuji Xerox | ||||||
Loss Contingencies [Line Items] | ||||||
Number of complaints filed | complaint | 5 | |||||
Number of class actions filed | class_action | 4 | |||||
Termination fee | $ 183 | |||||
Loss contingency, damages sought (in dollars) | $ 1,000 | |||||
Contractual and Corporate Obligations Guarantee and surety bonds | ||||||
Loss Contingencies [Line Items] | ||||||
Guarantor obligations, maximum exposure, undiscounted | $ 348 | |||||
HP Inc. | Miami Firefighters' Relief & Pension Fund V. Icahn, Et Al | ||||||
Loss Contingencies [Line Items] | ||||||
Marketable Securities, Gain (Loss) | $ 128 |
Preferred Stock (Details)
Preferred Stock (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019USD ($)dayvote$ / sharesshares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | [1] | |
Class of Stock [Line Items] | ||||
Preferred stock, carrying value | $ 214 | $ 214 | ||
Preferred stock, annual dividend (in dollars) | $ 14 | $ 14 | $ 14 | |
Initial conversion price per share of common stock | $ / shares | $ 26.70 | |||
Minimum number of trading days C/S close price must exceed conversion price to trigger Pfd Stock conversion | day | 20 | |||
Number of trading days used for measurement | day | 30 | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Preferred stock converted into common shares | shares | 37.4532 | |||
Preferred stock conversion to common stock, shares | shares | 6,742,000 | |||
Maximum common stock closing price, triggering conversion | $ / shares | $ 39 | |||
Maximum common stock closing price, percent, triggering conversion | 146.10% | |||
Series A | ||||
Class of Stock [Line Items] | ||||
Preferred stock converted into common shares | shares | 180,000 | |||
Preferred stock, aggregate liquidation value | $ 180 | |||
Preferred stock, carrying value | $ 214 | |||
Preferred stock, dividend rate, percentage | 8.00% | |||
Preferred stock, annual dividend (in dollars) | $ 14 | |||
Number of votes per ten shares | vote | 1 | |||
Preferred stock, number of votes if converted | vote | 674,157 | |||
[1] | Cash dividends declared on preferred stock for 2019 , 2018 and 2017 were $20 per share on a quarterly basis and $80 per share on an annual basis. |
Shareholders' Equity - Equity S
Shareholders' Equity - Equity Stocks Information (Details) - $ / shares shares in Millions | Dec. 31, 2019 | Aug. 01, 2019 |
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (shares) | 22 | |
Preferred stock, par value (dollars per share) | $ 1 | |
Common stock, authorized (shares) | 437.5 | |
Par value of common stock (dollars per share) | $ 1 | |
Share-based Payment Arrangement | ||
Class of Stock [Line Items] | ||
Common stock, capital shares reserved for future issuance (shares) | 15 | |
Series A | ||
Class of Stock [Line Items] | ||
Common stock, capital shares reserved for future issuance (shares) | 7 |
Shareholders' Equity - Treasury
Shareholders' Equity - Treasury Stock (Details) - Treasury Stock - USD ($) shares in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Jul. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Schedule of Common Stock and Treasury Stock [Line Items] | |||||
Authorized share repurchase program | $ 1,000,000,000 | $ 2,000,000,000 | $ 1,000,000,000 | ||
Stock repurchase program, remaining authorized repurchase amount | 700,000,000 | $ 700,000,000 | |||
Share repurchase cost | 300,000,000 | 1,000,000,000 | |||
Share repurchase fees | $ 0 | $ 1,000,000 | |||
Number of shares repurchased | 9,097 | 35,339 | 18,343 | 26,093 | |
July 2019 Share Repurchase Plan | |||||
Schedule of Common Stock and Treasury Stock [Line Items] | |||||
Authorized share repurchase program | $ 1,000,000,000 | ||||
Previous Share Repurchase Program | |||||
Schedule of Common Stock and Treasury Stock [Line Items] | |||||
Stock repurchase program, remaining authorized repurchase amount | $ 1,000,000,000 |
Shareholders' Equity - Common S
Shareholders' Equity - Common Stock and Treasury Stock Period Activity (Details) - $ / shares | 5 Months Ended | 7 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jul. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 01, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock, authorized (shares) | 437,500,000 | 437,500,000 | ||||
Par value of common stock (dollars per share) | $ 1 | |||||
Common stock issued (shares) | 214,621,000 | 214,621,000 | 231,690,000 | |||
Common stock outstanding (shares) | 212,590,000 | 212,590,000 | 229,623,000 | |||
Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance, Beginning | 231,690,000 | 231,690,000 | 254,613,000 | 253,594,000 | ||
Stock based compensation plans, net | 1,310,000 | 1,103,000 | 1,019,000 | |||
Acquisition of Treasury stock | 0 | 0 | ||||
Cancellation of Treasury stock | (18,379,000) | (24,026,000) | ||||
Balance, Ending | 214,621,000 | 214,621,000 | 231,690,000 | 254,613,000 | ||
Treasury Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Balance, Beginning | 2,067,000 | 2,067,000 | 0 | 0 | ||
Stock based compensation plans, net | 0 | 0 | 0 | |||
Acquisition of Treasury stock | 9,097,000 | 35,339,000 | 18,343,000 | 26,093,000 | ||
Cancellation of Treasury stock | (18,379,000) | (24,026,000) | ||||
Balance, Ending | 2,031,000 | 2,031,000 | 2,067,000 | 0 | ||
Xerox Corporation | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock, authorized (shares) | 1,000,000 | 1,000,000 | ||||
Par value of common stock (dollars per share) | $ 1 | $ 1 | ||||
Common stock issued (shares) | 100,000 | 100,000 | ||||
Common stock outstanding (shares) | 100,000 | 100,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)trading_dayshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) | |
Stock-Based Compensation Details [Line Items] | |||
Number of shares available for grant (shares) | shares | 13,000,000 | 14,000,000 | |
Stock-based compensation expense, pre-tax | $ | $ 50 | $ 57 | $ 52 |
Income tax benefit recognized in earnings | $ | $ 13 | $ 14 | $ 20 |
Restricted Stock Units (RSUs) | |||
Stock-Based Compensation Details [Line Items] | |||
Term (years) | 3 years | ||
Restricted Stock Units (RSUs) | Graded vesting after year one of service period | |||
Stock-Based Compensation Details [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percent) | 25.00% | ||
Term (years) | 1 year | ||
Restricted Stock Units (RSUs) | Graded vesting after year two of service period | |||
Stock-Based Compensation Details [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percent) | 25.00% | ||
Term (years) | 1 year | ||
Restricted Stock Units (RSUs) | Graded vesting after year three of service period | |||
Stock-Based Compensation Details [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percent) | 50.00% | ||
Term (years) | 3 years | ||
Performance Shares | |||
Stock-Based Compensation Details [Line Items] | |||
Term (years) | 3 years | 3 years | 3 years |
Measurement period for inputs (years) | 3 years | ||
Performance Shares | Revenue | |||
Stock-Based Compensation Details [Line Items] | |||
Weighting of measurement components (percent) | 25.00% | ||
Performance Shares | Free Cash Flow | |||
Stock-Based Compensation Details [Line Items] | |||
Weighting of measurement components (percent) | 25.00% | ||
Performance Shares | Absolute Share Price | |||
Stock-Based Compensation Details [Line Items] | |||
Weighting of measurement components (percent) | 50.00% | ||
Performance Shares | Performance-Based | |||
Stock-Based Compensation Details [Line Items] | |||
Weighting of measurement components (percent) | 50.00% | ||
Performance share grant basis - performance | shares | 0.6666666667 | ||
Performance share maximum overachievement | 100.00% | ||
Performance-based metric performance period (years) | 1 year | ||
Time-based metric performance period (years) | 2 years | ||
Performance Shares | Performance Based - Actual Results | |||
Stock-Based Compensation Details [Line Items] | |||
Performance-based metric performance period (years) | 3 years | ||
Performance Shares | Market-Based (ASP) | |||
Stock-Based Compensation Details [Line Items] | |||
Weighting of measurement components (percent) | 50.00% | ||
Performance Shares | TSR | |||
Stock-Based Compensation Details [Line Items] | |||
Term (years) | 3 years | 3 years | |
Performance share grant basis - TSR | shares | 0.3333333333 | ||
Total number of trading days of performance period | trading_day | 20 | ||
Performance-based metric performance period (years) | 1 year | ||
Time-based metric performance period (years) | 2 years | ||
Impact to compensation expense resulting from award modification | $ | $ 0 | ||
Performance Shares | Minimum | |||
Stock-Based Compensation Details [Line Items] | |||
Performance shares entitlement of original award grant (percent) | 0.00% | 0.00% | |
Performance Shares | Maximum | |||
Stock-Based Compensation Details [Line Items] | |||
Performance shares entitlement of original award grant (percent) | 200.00% | 200.00% | |
Equity Option | Graded vesting after year one of service period | |||
Stock-Based Compensation Details [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percent) | 25.00% | ||
Equity Option | Graded vesting after year two of service period | |||
Stock-Based Compensation Details [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percent) | 25.00% | ||
Equity Option | Graded vesting after year three of service period | |||
Stock-Based Compensation Details [Line Items] | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percent) | 50.00% | ||
Options outstanding, term (years) | 10 years |
Stock-Based Compensation - Meas
Stock-Based Compensation - Measurement Inputs (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Performance Shares | |||
Stock-Based Compensation Details [Line Items] | |||
Term (years) | 3 years | 3 years | 3 years |
Granted (dollars per share) | $ 19.46 | $ 27.36 | $ 32.80 |
Equity Option | |||
Stock-Based Compensation Details [Line Items] | |||
Risk-free interest rate (percent) | 2.63% | ||
Dividend yield (percent) | 3.25% | ||
Historical volatility (percent) | 27.25% | ||
Expected term (years) | 6 years 1 month 17 days | ||
Weighted average fair value (dollars per share) | $ 5.71 | ||
TSR | Performance Shares | |||
Stock-Based Compensation Details [Line Items] | |||
Term (years) | 3 years | 3 years | |
Risk-free interest rate (percent) | 2.51% | 2.39% | |
Dividend yield (percent) | 3.97% | 3.24% | |
Historical volatility (percent) | 32.95% | 29.12% | |
Granted (dollars per share) | $ 16.27 | $ 32.01 | |
TSR historical volatility look back period (years) | 3 years |
Stock-Based Compensation - Payo
Stock-Based Compensation - Payouts (Details) - TSR - Performance Shares | 12 Months Ended |
Dec. 31, 2019 | |
$40.00 and above | |
Stock-Based Compensation Details [Line Items] | |
Payout (percent of target) | 200.00% |
$35.00 | |
Stock-Based Compensation Details [Line Items] | |
Payout (percent of target) | 100.00% |
$30.00 | |
Stock-Based Compensation Details [Line Items] | |
Payout (percent of target) | 50.00% |
Below $30.00 | |
Stock-Based Compensation Details [Line Items] | |
Payout (percent of target) | 0.00% |
80th and above | |
Stock-Based Compensation Details [Line Items] | |
Payout (percent of target) | 200.00% |
50th | |
Stock-Based Compensation Details [Line Items] | |
Payout (percent of target) | 100.00% |
25th | |
Stock-Based Compensation Details [Line Items] | |
Payout (percent of target) | 35.00% |
Below 25th | |
Stock-Based Compensation Details [Line Items] | |
Payout (percent of target) | 0.00% |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Unrecognized Compensation | $ 60 | ||
Aggregate intrinsic value of award outstanding, options | $ 8 | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Outstanding at January 1 (shares) | 3,559 | 2,856 | 1,807 |
Outstanding at January 1 (dollars per share) | $ 29.51 | $ 30.65 | $ 30.10 |
Granted (shares) | 1,366 | 1,595 | 1,436 |
Granted (dollars per share) | $ 23.22 | $ 27.82 | $ 31.39 |
Vested (shares) | (1,666) | (214) | (117) |
Vested (dollars per share) | $ 29.28 | $ 30.39 | $ 36.99 |
Cancelled/Expired (shares) | (414) | (678) | (270) |
Cancelled/Expired (dollars per share) | $ 27.85 | $ 30.04 | $ 29.03 |
Outstanding at December 31 (shares) | 2,845 | 3,559 | 2,856 |
Outstanding at December 31 (dollars per share) | $ 26.87 | $ 29.51 | $ 30.65 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Unrecognized Compensation | $ 30 | ||
Remaining Weighted-Average Vesting Period (Years) | 1 year 7 months 6 days | ||
Aggregate intrinsic value of award outstanding | $ 105 | ||
Total Intrinsic Value | 55 | $ 6 | $ 3 |
Cash Received | 0 | 0 | 0 |
Tax Benefit | $ 11 | $ 2 | $ 1 |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Outstanding at January 1 (shares) | 2,462 | 3,117 | 5,054 |
Outstanding at January 1 (dollars per share) | $ 29.83 | $ 31.54 | $ 33.98 |
Granted (shares) | 1,433 | 1,060 | 1,349 |
Granted (dollars per share) | $ 19.46 | $ 27.36 | $ 32.80 |
Vested (shares) | (633) | (853) | (1,413) |
Vested (dollars per share) | $ 29.56 | $ 32.59 | $ 37.44 |
Cancelled/Expired (shares) | (432) | (862) | (1,873) |
Cancelled/Expired (dollars per share) | $ 27.50 | $ 30.26 | $ 34.59 |
Outstanding at December 31 (shares) | 2,830 | 2,462 | 3,117 |
Outstanding at December 31 (dollars per share) | $ 24.99 | $ 29.83 | $ 31.54 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Unrecognized Compensation | $ 28 | ||
Remaining Weighted-Average Vesting Period (Years) | 1 year 8 months 12 days | ||
Aggregate intrinsic value of award outstanding | $ 104 | ||
Total Intrinsic Value | 23 | $ 21 | $ 40 |
Cash Received | 0 | 0 | 0 |
Tax Benefit | $ 6 | $ 4 | $ 12 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at January 1 (shares) | 1,022 | 0 | 0 |
Outstanding at January 1 (dollars per share) | $ 27.84 | $ 0 | $ 0 |
Granted (shares) | 0 | 1,414 | 0 |
Granted (dollars per share) | $ 0 | $ 27.88 | $ 0 |
Canceled/expired (shares) | (92) | (392) | 0 |
Canceled/expired (dollars per share) | $ 27.92 | $ 27.98 | $ 0 |
Exercised (shares) | (69) | 0 | 0 |
Exercised (dollars per share) | $ 27.98 | $ 0 | $ 0 |
Outstanding at December 31 (shares) | 861 | 1,022 | 0 |
Outstanding at December 31 (dollars per share) | $ 27.83 | $ 27.84 | $ 0 |
Exercisable at December 31 (shares) | 233 | 39 | 0 |
Exercisable at December 31 (dollars per share) | $ 27.83 | $ 27.98 | $ 0 |
Unrecognized Compensation | $ 2 | ||
Remaining Weighted-Average Vesting Period (Years) | 1 year 3 months 18 days | ||
Cash Received | $ 2 | $ 0 | $ 0 |
Tax Benefit | 0 | 0 | 0 |
Total Intrinsic Value | $ 1 | $ 0 | $ 0 |
Restricted Stock Award | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Granted (shares) | 351 | ||
Granted (dollars per share) | $ 28.51 |
Other Comprehensive (Loss) In_3
Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Aggregate adjustment in period, pre-tax | $ 53 | $ (251) | $ 484 | ||
Aggregate adjustment in period, net of tax | 45 | (242) | 483 | ||
Divestiture - reclassification, pre-tax | 17 | 0 | 0 | ||
Divestiture - reclassification, net of tax | 17 | 0 | 0 | ||
Translation Adjustment Gains (Losses), Pre-tax | 70 | (251) | 484 | ||
Translation Adjustment Gains (Losses), Net of Tax | [1] | 62 | (242) | 483 | |
Changes in fair value of cash flow hedges gains (losses), pre-tax | 2 | 9 | (28) | ||
Changes in fair value of cash flow hedges gains (losses), net of tax | 1 | 8 | (23) | ||
Changes in cash flow hedges reclassed to earnings, pre-tax | (9) | 14 | 35 | ||
Changes in cash flow hedges reclassed to earnings, net of tax | (7) | 10 | 25 | ||
Other losses, pre-tax | 0 | (2) | (1) | ||
Other losses, net of tax | 0 | (2) | (1) | ||
Net Unrealized (Losses) Gains, Pre-tax | (7) | 21 | 6 | ||
Net Unrealized (Losses) Gains, Net of Tax | [1] | (6) | 16 | 1 | |
Net actuarial/prior service (losses) gains, pre-tax | (275) | 273 | 52 | ||
Net actuarial/prior service (losses) gains, net of tax | (202) | 198 | 64 | ||
Prior service amortization/curtailment, pre-tax | (81) | (26) | (10) | ||
Prior service amortization/curtailment, net of tax | (61) | (20) | (7) | ||
Actuarial loss amortization/settlement, pre-tax | 156 | 252 | 236 | ||
Actuarial loss amortization/settlement, net of tax | 118 | 190 | 158 | ||
Fuji Xerox changes in defined benefit plans, net, pre-tax | 8 | (25) | 29 | ||
Fuji Xerox changes in defined benefit plans, net, net of tax | 8 | (25) | 29 | ||
Other (losses) gains, pre-tax | (21) | 66 | (138) | ||
Other (losses) gains, net of tax | (21) | 66 | (138) | ||
Divestiture - reclassification, pre-tax | 148 | 0 | 0 | ||
Divestiture - reclassification, net of tax | 148 | 0 | 0 | ||
Changes in Defined Benefit Plans Gains, Pre-tax | (65) | 540 | 169 | ||
Changes in Defined Benefit Plans Gains, Net of Tax | [1] | (10) | 409 | 106 | |
Other Comprehensive (Loss) Income, Pre-tax | (2) | 310 | 659 | ||
Other Comprehensive (Loss) Income, Net of Tax | [1] | 46 | 183 | 590 | |
Less: Other comprehensive income attributable to noncontrolling interests, pre-tax | 0 | 0 | 1 | ||
Less: Other comprehensive income attributable to noncontrolling interests, net of tax | [1] | 0 | 0 | 1 | |
Other Comprehensive (Loss) Income Attributable to Xerox, Pre-Tax | (2) | 310 | 658 | ||
Other Comprehensive Income, Net Attributable to Xerox Holdings | [1] | $ 46 | $ 183 | $ 589 | |
Fuji Xerox Co., Ltd. and Xerox International Partners, The Sales | Discontinued Operations, Disposed of by Sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Divestiture - reclassification, pre-tax | $ 165 | ||||
[1] | Refer to Note 25 - Other Comprehensive (Loss) Income for gross components of Other Comprehensive Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects. |
Other Comprehensive (Loss) In_4
Other Comprehensive (Loss) Income - AOCL (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
AOCL [Abstract] | |||||
Cumulative translation adjustments | $ (1,961) | $ (2,023) | $ (1,781) | ||
Other unrealized (losses) gains, net | (2) | 4 | (12) | ||
Benefit plans net actuarial losses and prior service credits | (1,683) | (1,546) | (1,955) | ||
Total Accumulated Other Comprehensive Loss Attributable to Xerox Holdings | (3,646) | (3,565) | $ (3,748) | ||
Cumulative effect of change in accounting principles | 0 | [1] | $ 120 | ||
AOCL | |||||
AOCL [Abstract] | |||||
Cumulative effect of change in accounting principles | [1],[2],[3] | (127) | |||
Accounting Standards Update 2018-02 | AOCL | |||||
AOCL [Abstract] | |||||
Cumulative effect of change in accounting principles | $ (127) | ||||
[1] | Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Income Taxes for additional information related to the adoption of ASU 2018-02. | ||||
[2] | AOCL - Accumulated other comprehensive loss. | ||||
[3] | Includes $117 related to the adoption of the Revenue Recognition Standard ASU 2014-09 - Revenue from Contracts with Customers (ASC Topic 606), see Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, and $3 related to our share of Fuji Xerox's adoption of ASU 2016-01 - Financial Instruments - Classification and Measurement. |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic Earnings (Loss) per Share: | |||||||||||||||
Net Income from continuing operations attributable to Xerox Holdings | $ 648 | $ 306 | $ 66 | ||||||||||||
Accrued dividends on preferred stock | (14) | (14) | (14) | ||||||||||||
Accrued dividends on preferred stock | 0 | (14) | (14) | ||||||||||||
Adjusted Net income from continuing operations available to common shareholders | 634 | 292 | 52 | ||||||||||||
Income from discontinued operations attributable to Xerox Holdings, net of tax | 705 | 55 | 129 | ||||||||||||
Adjusted Net income available to common shareholders | $ 1,339 | $ 347 | $ 181 | ||||||||||||
Weighted-average common shares outstanding | 221,969 | 248,707 | 254,341 | ||||||||||||
Continuing operations (in dollars per share) | $ 2.86 | $ 1.17 | $ 0.20 | ||||||||||||
Discontinued operations (in dollars per share) | 3.17 | 0.23 | 0.51 | ||||||||||||
Basic Earnings per Share | $ 6.03 | $ 1.40 | $ 0.71 | ||||||||||||
Diluted Earnings (Loss) per Share: | |||||||||||||||
Net Income from continuing operations attributable to Xerox Holdings | $ 648 | $ 306 | $ 66 | ||||||||||||
Accrued dividends on preferred stock | 0 | (14) | (14) | ||||||||||||
Adjusted Net income from continuing operations available to common shareholders | 648 | 292 | 52 | ||||||||||||
Income from discontinued operations attributable to Xerox Holdings, net of tax | 705 | 55 | 129 | ||||||||||||
Adjusted Net income available to common shareholders | $ 1,353 | $ 347 | $ 181 | ||||||||||||
Weighted-average common shares outstanding | 221,969 | 248,707 | 254,341 | ||||||||||||
Common shares issuable with respect to: | |||||||||||||||
Adjusted Weighted average common shares outstanding | 233,169 | 251,660 | 256,570 | ||||||||||||
Continuing operations (in dollars per share) | $ 2.78 | $ 1.16 | $ 0.20 | ||||||||||||
Discontinued operations (in dollars per share) | 3.02 | 0.22 | 0.51 | ||||||||||||
Diluted Earnings per Share | $ 5.80 | $ 1.38 | $ 0.71 | ||||||||||||
Stock options, shares | 2,077 | 10,832 | 10,448 | ||||||||||||
Dividends per common share (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.28 | $ 1 | $ 1 | $ 1 |
Stock options | |||||||||||||||
Common shares issuable with respect to: | |||||||||||||||
Stock options, Restricted stock and performance shares | 55 | 0 | 0 | ||||||||||||
Restricted stock and performance shares | |||||||||||||||
Common shares issuable with respect to: | |||||||||||||||
Stock options, Restricted stock and performance shares | 4,403 | 2,953 | 2,229 | ||||||||||||
Convertible preferred stock | |||||||||||||||
Common shares issuable with respect to: | |||||||||||||||
Convertible preferred stock, shares | 6,742 | 0 | 0 | ||||||||||||
Stock options | |||||||||||||||
Common shares issuable with respect to: | |||||||||||||||
Stock options, shares | 805 | 1,022 | 0 | ||||||||||||
Restricted stock and performance shares | |||||||||||||||
Common shares issuable with respect to: | |||||||||||||||
Stock options, shares | 1,272 | 3,068 | 3,706 | ||||||||||||
Convertible preferred stock | |||||||||||||||
Common shares issuable with respect to: | |||||||||||||||
Stock options, shares | 0 | 6,742 | 6,742 |
Earnings per Share - Anti-Dilu
Earnings per Share - Anti-Dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Anti-Dilutive Securities | 2,077 | 10,832 | 10,448 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Anti-Dilutive Securities | 805 | 1,022 | 0 |
Restricted stock and performance shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Anti-Dilutive Securities | 1,272 | 3,068 | 3,706 |
Convertible preferred stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Anti-Dilutive Securities | 0 | 6,742 | 6,742 |
Earnings per Share - Dividends
Earnings per Share - Dividends per Common Share (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||||||
Dividends per common share (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.28 | $ 1 | $ 1 | $ 1 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event £ in Millions | Jan. 05, 2020USD ($) | Jan. 31, 2020USD ($) | Jan. 31, 2020GBP (£) | Jan. 06, 2020USD ($) |
Fuji Xerox | ||||
Subsequent Event [Line Items] | ||||
Period of trademark use after termination (years) | 2 years | |||
Royalty receivable | $ 100,000,000 | |||
HP Inc. | Citigroup Global Markets Inc., Mizuho Bank, Ltd. And Bank Of America, N.A. (The Commitment Parties) | Bridge Loan | ||||
Subsequent Event [Line Items] | ||||
Amount committed by lender | $ 24,000,000,000 | |||
Contingent fees | 140,000,000 | |||
HP Inc. | Citigroup Global Markets Inc., Mizuho Bank, Ltd. And Bank Of America, N.A. (The Commitment Parties) | Senior Unsecured 364-Day Term Loan Bridge Facility | Bridge Loan | ||||
Subsequent Event [Line Items] | ||||
Amount committed by lender | $ 19,500,000,000 | |||
Debt, term (days) | 364 days | |||
HP Inc. | Citigroup Global Markets Inc., Mizuho Bank, Ltd. And Bank Of America, N.A. (The Commitment Parties) | Senior Unsecured 60-Day Term Loan Bridge Facility | Bridge Loan | ||||
Subsequent Event [Line Items] | ||||
Amount committed by lender | $ 4,500,000,000 | |||
Debt, term (days) | 60 days | |||
Arena Group | ||||
Subsequent Event [Line Items] | ||||
Consideration transferred | $ 46,000,000 | £ 35 |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 148 | $ 167 | $ 174 |
Additions charged to bad debt provision | 46 | 36 | 33 |
Amounts (credited) charged to other income statement accounts | 3 | 4 | 13 |
Deductions and other, net of recoveries | (53) | (59) | (53) |
Balance at end of period | 144 | 148 | 167 |
Accounts Receivable | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 56 | 59 | 64 |
Additions charged to bad debt provision | 18 | 12 | 16 |
Amounts (credited) charged to other income statement accounts | 0 | 2 | (2) |
Deductions and other, net of recoveries | (19) | (17) | (19) |
Balance at end of period | 55 | 56 | 59 |
Finance Receivables | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 92 | 108 | 110 |
Additions charged to bad debt provision | 28 | 24 | 17 |
Amounts (credited) charged to other income statement accounts | 3 | 2 | 15 |
Deductions and other, net of recoveries | (34) | (42) | (34) |
Balance at end of period | 89 | 92 | 108 |
Deferred Tax Assets | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 397 | 435 | 416 |
Additions charged to bad debt provision | 16 | 3 | 6 |
Amounts (credited) charged to other income statement accounts | (14) | (41) | 13 |
Balance at end of period | 399 | 397 | 435 |
Xerox Corporation | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 148 | 167 | 174 |
Additions charged to bad debt provision | 46 | 33 | |
Amounts (credited) charged to other income statement accounts | 3 | 4 | |
Deductions and other, net of recoveries | (53) | (53) | |
Balance at end of period | 148 | 167 | |
Xerox Corporation | Accounts Receivable | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 59 | 64 | |
Additions charged to bad debt provision | 12 | 16 | |
Amounts (credited) charged to other income statement accounts | 0 | 2 | |
Deductions and other, net of recoveries | (19) | (17) | (19) |
Balance at end of period | 55 | 59 | |
Xerox Corporation | Finance Receivables | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 92 | 108 | |
Additions charged to bad debt provision | 28 | 17 | |
Amounts (credited) charged to other income statement accounts | 15 | ||
Deductions and other, net of recoveries | (34) | (42) | (34) |
Balance at end of period | 89 | 92 | 108 |
Xerox Corporation | Deferred Tax Assets | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 397 | 435 | 416 |
Additions charged to bad debt provision | 16 | 3 | 6 |
Amounts (credited) charged to other income statement accounts | (14) | (41) | 13 |
Balance at end of period | $ 399 | $ 397 | $ 435 |