Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2021shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2021 |
Document Transition Report | false |
Entity Registrant Name | XEROX HOLDINGS CORPORATION |
Entity Incorporation, State or Country Code | NY |
Entity File Number | 001-39013 |
Entity Tax Identification Number | 83-3933743 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Entity Central Index Key | 0001770450 |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Entity Address, Address Line One | P.O. Box 4505 |
Entity Address, Address Line Two | 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 | 849-5216 |
Title of 12(b) Security | Common Stock, $1 par value |
Trading Symbol | XRX |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 191,947,343 |
XEROX CORPORATION | |
Entity Information [Line Items] | |
Entity Registrant Name | XEROX CORPORATION |
Entity Incorporation, State or Country Code | NY |
Entity File Number | 001-04471 |
Entity Tax Identification Number | 16-0468020 |
Entity Central Index Key | 0000108772 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Total Revenues | $ 1,710 | $ 1,860 |
Costs and Expenses | ||
Cost of financing | 28 | 30 |
Research, development and engineering expenses | 74 | 84 |
Selling, administrative and general expenses | 448 | 541 |
Restructuring and related costs, net | 17 | 41 |
Amortization of intangible assets | 15 | 11 |
Transaction and related costs, net | 0 | 17 |
Other expenses, net | 4 | 23 |
Total Costs and Expenses | 1,657 | 1,865 |
Income (Loss) before Income Taxes and Equity Income | 53 | (5) |
Income tax expense (benefit) | 14 | (1) |
Equity in net income of unconsolidated affiliates | 0 | 2 |
Net Income (Loss) | 39 | (2) |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net Income (Loss) Attributable to Xerox Holdings/Xerox | $ 39 | $ (2) |
Basic Earnings (Loss) per Share | ||
Basic earnings (loss) per share (USD per share) | $ 0.18 | $ (0.03) |
Diluted Earnings (Loss) per Share | ||
Diluted earnings (loss) per share (USD per share) | $ 0.18 | $ (0.03) |
Sales | ||
Revenues | ||
Total Revenues | $ 602 | $ 565 |
Costs and Expenses | ||
Cost of sales and services | 420 | 387 |
Services, maintenance and rentals | ||
Revenues | ||
Total Revenues | 1,053 | 1,236 |
Costs and Expenses | ||
Cost of sales and services | 651 | 731 |
Financing | ||
Revenues | ||
Total Revenues | 55 | 59 |
XEROX CORPORATION | ||
Revenues | ||
Total Revenues | 1,710 | 1,860 |
Costs and Expenses | ||
Cost of financing | 28 | 30 |
Research, development and engineering expenses | 74 | 84 |
Selling, administrative and general expenses | 447 | 541 |
Restructuring and related costs, net | 17 | 41 |
Amortization of intangible assets | 14 | 11 |
Transaction and related costs, net | 0 | 17 |
Other expenses, net | 4 | 23 |
Total Costs and Expenses | 1,655 | 1,865 |
Income (Loss) before Income Taxes and Equity Income | 55 | (5) |
Income tax expense (benefit) | 14 | (1) |
Equity in net income of unconsolidated affiliates | 0 | 2 |
Net Income (Loss) | 41 | (2) |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net Income (Loss) Attributable to Xerox Holdings/Xerox | 41 | (2) |
XEROX CORPORATION | Sales | ||
Revenues | ||
Total Revenues | 602 | 565 |
Costs and Expenses | ||
Cost of sales and services | 420 | 387 |
XEROX CORPORATION | Services, maintenance and rentals | ||
Revenues | ||
Total Revenues | 1,053 | 1,236 |
Costs and Expenses | ||
Cost of sales and services | 651 | 731 |
XEROX CORPORATION | Financing | ||
Revenues | ||
Total Revenues | $ 55 | $ 59 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Net Income (Loss) | $ 39 | $ (2) | |
Less: Net income attributable to noncontrolling interests | 0 | 0 | |
Net Income (Loss) Attributable to Xerox Holdings/Xerox | 39 | (2) | |
Other Comprehensive (Loss) Income, Net | |||
Translation adjustments, net | [1] | (51) | (197) |
Unrealized (losses) gains, net | [1] | (7) | 5 |
Changes in defined benefit plans, net | [1] | 55 | 54 |
Other Comprehensive Loss, Net of Tax Attributable to Xerox Holdings/Xerox | [1] | (3) | (138) |
Comprehensive Income (Loss), Net | |||
Comprehensive Income (Loss), Net Attributable to Xerox Holdings/Xerox | 36 | (140) | |
XEROX CORPORATION | |||
Net Income (Loss) | 41 | (2) | |
Less: Net income attributable to noncontrolling interests | 0 | 0 | |
Net Income (Loss) Attributable to Xerox Holdings/Xerox | 41 | (2) | |
Other Comprehensive (Loss) Income, Net | |||
Translation adjustments, net | [2] | (51) | (197) |
Unrealized (losses) gains, net | [2] | (7) | 5 |
Changes in defined benefit plans, net | [2] | 55 | 54 |
Other Comprehensive Loss, Net of Tax Attributable to Xerox Holdings/Xerox | [2] | (3) | (138) |
Comprehensive Income (Loss), Net | |||
Comprehensive Income (Loss), Net Attributable to Xerox Holdings/Xerox | $ 38 | $ (140) | |
[1] | Refer to Note 17 - Other Comprehensive Income (Loss) for gross components of Other comprehensive loss, net, reclassification adjustments out of Accumulated other comprehensive loss and related tax effects. | ||
[2] | Refer to Note 17 - Other Comprehensive Income (Loss) for gross components of Other comprehensive loss, net, reclassification adjustments out of Accumulated other comprehensive loss and related tax effects. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) shares in Thousands, $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 2,379 | $ 2,625 |
Accounts receivable (net of allowance) | 781 | 883 |
Billed portion of finance receivables (net of allowance) | 92 | 99 |
Finance receivables, net | 1,065 | 1,082 |
Inventories | 841 | 843 |
Other current assets | 262 | 251 |
Total current assets | 5,420 | 5,783 |
Finance receivables due after one year (net of allowance) | 1,920 | 1,984 |
Equipment on operating leases, net | 277 | 296 |
Land, buildings and equipment, net | 393 | 407 |
Intangible assets, net | 223 | 237 |
Goodwill | 4,075 | 4,071 |
Deferred tax assets | 510 | 508 |
Other long-term assets | 1,454 | 1,455 |
Total Assets | 14,272 | 14,741 |
Liabilities and Equity | ||
Short-term debt and current portion of long-term debt | 678 | 394 |
Accounts payable | 932 | 983 |
Accrued compensation and benefits costs | 241 | 261 |
Accrued expenses and other current liabilities | 794 | 840 |
Total current liabilities | 2,645 | 2,478 |
Long-term debt | 3,674 | 4,050 |
Pension and other benefit liabilities | 1,473 | 1,566 |
Post-retirement medical benefits | 339 | 340 |
Other long-term liabilities | 498 | 497 |
Total Liabilities | 8,629 | 8,931 |
Commitments and Contingencies (See Note 19) | ||
Convertible Preferred Stock | 214 | 214 |
Common stock | 199 | 198 |
Additional paid-in capital | 2,456 | 2,445 |
Treasury stock, at cost | (162) | 0 |
Retained earnings | 6,267 | 6,281 |
Accumulated other comprehensive loss | (3,335) | (3,332) |
Xerox Holdings/Xerox shareholders’ equity | 5,425 | 5,592 |
Noncontrolling interests | 4 | 4 |
Total Equity | 5,429 | 5,596 |
Total Liabilities and Equity | $ 14,272 | $ 14,741 |
Shares of common stock issued | 198,651 | 198,386 |
Treasury stock | (6,704) | 0 |
Shares of Common Stock Outstanding | 191,947 | 198,386 |
XEROX CORPORATION | ||
Assets | ||
Cash and cash equivalents | $ 2,379 | $ 2,625 |
Accounts receivable (net of allowance) | 781 | 883 |
Billed portion of finance receivables (net of allowance) | 92 | 99 |
Finance receivables, net | 1,065 | 1,082 |
Inventories | 841 | 843 |
Other current assets | 263 | 251 |
Total current assets | 5,421 | 5,783 |
Finance receivables due after one year (net of allowance) | 1,920 | 1,984 |
Equipment on operating leases, net | 277 | 296 |
Land, buildings and equipment, net | 393 | 407 |
Intangible assets, net | 216 | 229 |
Goodwill | 4,072 | 4,068 |
Deferred tax assets | 510 | 508 |
Other long-term assets | 1,455 | 1,455 |
Total Assets | 14,264 | 14,730 |
Liabilities and Equity | ||
Short-term debt and current portion of long-term debt | 678 | 394 |
Accounts payable | 932 | 983 |
Accrued compensation and benefits costs | 241 | 261 |
Accrued expenses and other current liabilities | 736 | 750 |
Total current liabilities | 2,587 | 2,388 |
Long-term debt | 2,180 | 2,557 |
Related party debt | 1,494 | 0 |
Pension and other benefit liabilities | 1,473 | 1,566 |
Post-retirement medical benefits | 339 | 340 |
Other long-term liabilities | 497 | 494 |
Total Liabilities | 8,570 | 7,345 |
Commitments and Contingencies (See Note 19) | ||
Additional paid-in capital | 3,351 | 4,879 |
Retained earnings | 5,674 | 5,834 |
Accumulated other comprehensive loss | (3,335) | (3,332) |
Xerox Holdings/Xerox shareholders’ equity | 5,690 | 7,381 |
Noncontrolling interests | 4 | 4 |
Total Equity | 5,694 | 7,385 |
Total Liabilities and Equity | $ 14,264 | $ 14,730 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Accounts receivable, allowance for credit loss, current | $ 68 | $ 69 |
Billed portion of finance receivables, net | 4 | 4 |
Financing receivables, allowance for credit loss, noncurrent | 131 | 129 |
XEROX CORPORATION | ||
Accounts receivable, allowance for credit loss, current | 68 | 69 |
Billed portion of finance receivables, net | 4 | 4 |
Financing receivables, allowance for credit loss, noncurrent | $ 131 | $ 129 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net Income (Loss) | $ 39 | $ (2) |
Adjustments required to reconcile Net income (loss) to Cash flows from operating activities | ||
Depreciation and amortization | 86 | 94 |
Provisions | 20 | 80 |
Net gain on sales of businesses and assets | 0 | (1) |
Stock-based compensation | 16 | 11 |
Restructuring and asset impairment charges | 21 | 29 |
Payments for restructurings | (27) | (35) |
Defined benefit pension cost | 0 | 24 |
Contributions to defined benefit pension plans | (35) | (33) |
Decrease in accounts receivable and billed portion of finance receivables | 92 | 166 |
Increase in inventories | (18) | (126) |
Increase in equipment on operating leases | (28) | (32) |
Decrease in finance receivables | 37 | 93 |
Decrease (increase) in other current and long-term assets | 18 | (16) |
(Decrease) increase in accounts payable | (31) | 51 |
Decrease in accrued compensation | (36) | (108) |
Decrease in other current and long-term liabilities | (35) | (38) |
Net change in income tax assets and liabilities | 6 | (10) |
Net change in derivative assets and liabilities | 3 | 8 |
Other operating, net | (11) | 18 |
Net cash provided by operating activities | 117 | 173 |
Cash Flows from Investing Activities | ||
Cost of additions to land, buildings, equipment and software | (17) | (23) |
Proceeds from sales of businesses and assets | 0 | 2 |
Acquisitions, net of cash acquired | 0 | (193) |
Net cash used in investing activities | (17) | (214) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of long-term debt | 0 | 2 |
Payments on long-term debt | (95) | 0 |
Dividends | (54) | (58) |
Payments to acquire treasury stock, including fees | (162) | 0 |
Other financing, net | (7) | (4) |
Net cash used in financing activities | (318) | (60) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (12) | (29) |
Decrease in cash, cash equivalents and restricted cash | (230) | (130) |
Cash, cash equivalents and restricted cash at beginning of period | 2,691 | 2,795 |
Cash, Cash Equivalents and Restricted Cash at End of Period | 2,461 | 2,665 |
XEROX CORPORATION | ||
Cash Flows from Operating Activities | ||
Net Income (Loss) | 41 | (2) |
Adjustments required to reconcile Net income (loss) to Cash flows from operating activities | ||
Depreciation and amortization | 85 | 94 |
Provisions | 20 | 80 |
Net gain on sales of businesses and assets | 0 | (1) |
Stock-based compensation | 16 | 11 |
Restructuring and asset impairment charges | 21 | 29 |
Payments for restructurings | (27) | (35) |
Defined benefit pension cost | 0 | 24 |
Contributions to defined benefit pension plans | (35) | (33) |
Decrease in accounts receivable and billed portion of finance receivables | 92 | 166 |
Increase in inventories | (18) | (126) |
Increase in equipment on operating leases | (28) | (32) |
Decrease in finance receivables | 37 | 93 |
Decrease (increase) in other current and long-term assets | 18 | (16) |
(Decrease) increase in accounts payable | (31) | 51 |
Decrease in accrued compensation | (36) | (108) |
Decrease in other current and long-term liabilities | (36) | (38) |
Net change in income tax assets and liabilities | 6 | (10) |
Net change in derivative assets and liabilities | 3 | 8 |
Other operating, net | (11) | 18 |
Net cash provided by operating activities | 117 | 173 |
Cash Flows from Investing Activities | ||
Cost of additions to land, buildings, equipment and software | (17) | (23) |
Proceeds from sales of businesses and assets | 0 | 2 |
Acquisitions, net of cash acquired | 0 | (193) |
Net cash used in investing activities | (17) | (214) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of long-term debt | 0 | 2 |
Payments on long-term debt | (95) | 0 |
Distributions to parent | (220) | (58) |
Other financing, net | (3) | (4) |
Net cash used in financing activities | (318) | (60) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (12) | (29) |
Decrease in cash, cash equivalents and restricted cash | (230) | (130) |
Cash, cash equivalents and restricted cash at beginning of period | 2,691 | 2,795 |
Cash, Cash Equivalents and Restricted Cash at End of Period | $ 2,461 | $ 2,665 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation 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. References to "Xerox Holdings Corporation" refer to the stand-alone parent company and do not include its subsidiaries. References to "Xerox Corporation" refer to the stand-alone company and do not include its subsidiaries. The accompanying unaudited Condensed 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 unaudited Condensed Consolidated Financial Statements for each registrant. The accompanying unaudited Condensed Consolidated Financial Statements of both Xerox Holdings and Xerox have been prepared in accordance with the accounting policies described in the Combined 2020 Annual Report on Form 10-K ("2020 Annual Report"), except as noted herein, and the interim reporting requirements of Form 10-Q. Accordingly, certain information and note disclosures normally included in our annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. You should read these Condensed Consolidated Financial Statements in conjunction with the Consolidated Financial Statements included in the Combined 2020 Annual Report. In our opinion, all adjustments, which are necessary for a fair statement of financial position, operating results and cash flows for the interim periods presented, have been made. These adjustments consist of normal recurring items. Interim results of operations are not necessarily indicative of the results of the full year. As of March 31, 2021, although we did see certain improvement in our financial results as businesses gained confidence in the progress to control the COVID-19 pandemic and resumed investments in new printing technology and services, the pandemic continues to progress and impact our financial results. Accordingly, many of our estimates and assumptions continue to require an increased level of judgment and may have to change in the future as events continue to evolve and additional information becomes available. For convenience and ease of reference, we refer to the financial statement caption “Income (Loss) before Income Taxes and Equity Income” as “pre-tax income (loss)”. Notes to the Condensed Consolidated Financial Statements reflect the activity for both Xerox Holdings and Xerox for all periods presented, unless otherwise noted. Goodwill Interim Impairment Evaluation We perform our annual goodwill impairment testing in the fourth quarter of each year. After completing our quantitative impairment review in the fourth quarter 2020, we concluded that Goodwill was not impaired. Based on various forecast models, which we believe reflected the inherent uncertainty of the future, we estimated that the excess of fair value over carrying value ranged between 15% and 20%. During the quarter ended March 31, 2021, although business performance continues to improve, we determined that the continued negative impacts on our current operations resulting from the COVID-19 pandemic as well as a market capitalization that remains less than book value required us to qualitatively assess whether a triggering event had occurred and whether it was more likely than not that our goodwill was impaired as of March 31, 2021. Based on our interim qualitative assessment as of March 31, 2021, we determined that it was more-likely-than-not that the fair value of the Company was greater than the net book value and that we did not have a “triggering event” requiring a quantitative or Step 1 assessment of goodwill. Our review of macroeconomic and industry considerations, as well as the Company's financial results for the first quarter 2021 and projections for the full year 2021, were consistent with the expectations and sensitivities assessed as part of our review performed in the fourth |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Xerox Holdings and Xerox consider the applicability and impact of all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB). The ASUs listed below apply to both registrants. ASUs not listed below were assessed and determined to be not applicable to the Condensed Consolidated Financial Statements of either registrant. Accounting Standard Updates to be Adopted: Debt In August 2020, the FASB issued ASU 2020-06 , Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40). This update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. This update is effective for our fiscal year beginning January 1, 2022. We are currently evaluating the impact of the adoption of this standard on the Company’s consolidated financial statements and related disclosures. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04 , Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01 , Reference Rate Reform (Topic 848): Scope , which provided clarification guidance to ASU 2020-04. These ASUs were effective commencing with our quarter ended March 31, 2020 through December 31, 2022. There has been no impact to date as a result of ASU 2020-04 or ASU 2021-01 and subsequent amendments on reference rate reform, however we continue to evaluate potential future impacts that may result from the discontinuation of LIBOR or other reference rates as well as the accounting provided in this update on our financial condition, results of operations, and cash flows. Accounting Standard Updates Adopted in 2021: Income Taxes In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which was 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. We adopted this update effective for our fiscal year beginning January 1, 2021. The adoption did not have nor is expected to have a material impact on our results of operations, financial position or disclosures. Other Updates In 2021 and 2020, the FASB also issued the following ASUs, which impact the Company but did not have or 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. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows: Three Months Ended 2021 2020 Primary geographical markets (1) : United States $ 974 $ 1,114 Europe 499 481 Canada 93 108 Other 144 157 Total Revenues $ 1,710 $ 1,860 Major product and services lines: Equipment $ 381 $ 325 Supplies, paper and other sales 221 240 Maintenance agreements (2) 435 529 Service arrangements (3) 489 566 Rental and other 129 141 Financing 55 59 Total Revenues $ 1,710 $ 1,860 Sales channels: Direct equipment lease (4) $ 147 $ 126 Distributors & resellers (5) 254 223 Customer direct 201 216 Total Sales $ 602 $ 565 _____________ (1) Geographic area data is based upon the location of the subsidiary reporting the revenue. (2) 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). (3) Primarily includes revenues from our Managed Services offerings. Also includes revenues from embedded operating leases, which were not significant. (4) Primarily reflects sales through bundled lease arrangements. (5) 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 $126 and $130 at March 31, 2021 and December 31, 2020, respectively. The majority of the balance at March 31, 2021 is expected to 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. Incremental direct costs are as follows: Three Months Ended 2021 2020 Incremental direct costs of obtaining a contract $ 13 $ 15 Amortization of incremental direct costs 19 21 The balance of deferred incremental direct costs net of accumulated amortization at March 31, 2021 and December 31, 2020 was $140 and $145, 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 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. As of March 31, 2021 and December 31, 2020 amounts deferred associated with contract fulfillment costs and inducements were $17 and $13, respectively. The related amortization was $1 and $1 for the three months ended March 31, 2021 and 2020, 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. |
Lessor
Lessor | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lessor | Lessor 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: Three Months Ended Location in Statements of Income (Loss) 2021 2020 Revenue from sales type leases Sales $ 147 $ 126 Interest income on lease receivables Financing 55 59 Lease income - operating leases Services, maintenance and rentals 67 86 Variable lease income Services, maintenance and rentals 15 22 Total Lease income $ 284 $ 293 Profit at lease commencement on sales type leases was estimated to be $56 and $43 for the three months ended March 31, 2021 and 2020, respectively. |
Lessor | Lessor 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: Three Months Ended Location in Statements of Income (Loss) 2021 2020 Revenue from sales type leases Sales $ 147 $ 126 Interest income on lease receivables Financing 55 59 Lease income - operating leases Services, maintenance and rentals 67 86 Variable lease income Services, maintenance and rentals 15 22 Total Lease income $ 284 $ 293 Profit at lease commencement on sales type leases was estimated to be $56 and $43 for the three months ended March 31, 2021 and 2020, respectively. |
Supplementary Financial Informa
Supplementary Financial Information | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Financial Information [Abstract] | |
Supplementary Financial Information | Supplementary Financial Information Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash amounts were as follows: March 31, December 31, Cash and cash equivalents $ 2,379 $ 2,625 Restricted cash Litigation deposits in Brazil 38 42 Escrow and cash collections related to secured borrowing arrangements (1) 43 22 Other restricted cash 1 2 Total Restricted cash 82 66 Cash, cash equivalents and restricted cash $ 2,461 $ 2,691 _____________ (1) Represents collections on finance receivables pledged for secured borrowings that will be remitted to lenders in the following month. Restricted cash primarily relates to cash collections on finance receivables that were pledged for secured borrowings as well as escrow cash deposits made in Brazil associated with ongoing litigation. As more fully discussed in Note 19 - 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 Condensed Consolidated Balance Sheets based on when the cash will be contractually or judicially released. Restricted cash was reported in the Condensed Consolidated Balance Sheets as follows: March 31, December 31, Other current assets $ 44 $ 23 Other long-term assets 38 43 Total Restricted cash $ 82 $ 66 Supplemental Cash Flow Information Summarized cash flow information is as follows: Three Months Ended 2021 2020 Provision for receivables $ 11 $ 74 Provision for inventory 9 6 Provision for product warranty 2 2 Depreciation of buildings and equipment 19 21 Depreciation and obsolescence of equipment on operating leases 42 51 Amortization of internal use software 10 11 Amortization of acquired intangible assets (1) 15 11 Amortization of customer contract costs (2) 20 22 Cost of additions to land, buildings and equipment 8 18 Cost of additions to internal use software 9 5 Common stock dividends - Xerox Holdings Corporation 50 54 Preferred stock dividends - Xerox Holdings Corporation 4 4 Repurchases related to stock-based compensation - Xerox Holdings Corporation 4 7 _____________ (1) Amortization of acquired intangible assets of Xerox is $14 for the three months ended March 31, 2021. (2) Amortization of customer contract costs is reported in Decrease (increase) in other current and long-term assets in the Condensed Consolidated Statements of Cash Flows. Refer to Note 3 - Revenue - Contract Costs for additional information. |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net were as follows: March 31, December 31, Invoiced $ 637 $ 735 Accrued (1) 212 217 Allowance for doubtful accounts (68) (69) Accounts receivable, net $ 781 $ 883 _____________ (1) Accrued receivables include amounts to be invoiced in the subsequent quarter for current services provided. The allowance for doubtful accounts was as follows: 2021 2020 Balance at December 31 st $ 69 $ 55 Provision 4 8 Charge-offs (5) (2) Recoveries and other (1) — (1) Balance at March 31 st $ 68 $ 60 _____________ (1) 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. 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 based on an assessment of past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends. Based on that assessment the allowance for doubtful accounts as a percent of gross accounts receivable was 8.0% at March 31, 2021 and 7.2% at December 31, 2020. The allowance for doubtful accounts as a percent of gross accounts receivable remain at an elevated level as compared to historical levels primarily as a result of the macroeconomic and market disruption caused by COVID-19. 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, $93 and $136 remained uncollected as of March 31, 2021 and December 31, 2020, respectively. Accounts receivable sales activity was as follows: Three Months Ended 2021 2020 Accounts receivable sales (1) $ 107 $ 53 ____________ (1) Losses on sales were not material. 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. 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 assets. Finance receivables, net were as follows: March 31, December 31, Gross receivables $ 3,596 $ 3,691 Unearned income (384) (393) Subtotal 3,212 3,298 Residual values — — Allowance for doubtful accounts (135) (133) Finance receivables, net 3,077 3,165 Less: Billed portion of finance receivables, net 92 99 Less: Current portion of finance receivables not billed, net 1,065 1,082 Finance receivables due after one year, net $ 1,920 $ 1,984 Finance Receivables – Allowance for Credit Losses and Credit Quality Our finance receivable portfolios are primarily in the U.S., Canada and EMEA. 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 credit losses is determined principally based on an assessment of origination year and past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends. Based on that assessment the allowance for doubtful credit losses as a percentage of gross finance receivables (net of unearned income) was 4.2% at March 31, 2021 and 4.0% at December 31, 2020. In determining the level of reserve required we had to critically assess current and forecasted economic conditions in light of the COVID-19 pandemic to ensure we objectively included those expected impacts in the determination of our reserve. Our assessment also included a review of current portfolio credit metrics and the level of write-offs incurred over the past year of the COVID-19 pandemic. 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 projected loss rates are primarily based upon historical loss experience adjusted for judgments about the probable effects of relevant observable data including current and future 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 Since our allowance for doubtful finance receivables is effectively determined by geography, the risk characteristics in our finance receivable portfolio segments will generally be consistent with the risk factors associated with the economies of the countries/regions included in those geographies. Since EMEA is comprised of various countries and regional economies, the risk profile within that portfolio segment is somewhat more diversified due to the varying economic conditions among and within the countries. The first quarter 2020 reflected an incremental $60 provision to cover estimated write-offs on our finance receivable portfolio from the economic disruption caused by the COVID-19 pandemic. Subsequent to the first quarter of 2020 provision and through the first quarter of 2021, actual write-offs incurred to date have lagged expectations but remain in line with our original projections over the life of the lease portfolio and consistent with future expectations regarding our estimated impacts from the COVID-19 pandemic. Accordingly, our total reserve as a percent of receivables has remained fairly consistent subsequent to the first quarter 2020 charge at around 4%. The allowance for doubtful accounts as well as the related investment in finance receivables were as follows: United States Canada EMEA (1) Total Balance at December 31, 2020 $ 77 $ 15 $ 41 $ 133 Provision 2 1 3 6 Charge-offs (2) — (1) (3) Recoveries and other (2) 1 — (2) (1) Balance at March 31, 2021 $ 78 $ 16 $ 41 $ 135 Finance receivables as of March 31, 2021 collectively evaluated for impairment (3) $ 1,806 $ 288 $ 1,118 $ 3,212 Balance at December 31, 2019 $ 59 $ 10 $ 20 $ 89 Provision 35 6 25 66 Charge-offs (3) (1) (4) (8) Recoveries and other (2) — — (1) (1) Balance at March 31, 2020 $ 91 $ 15 $ 40 $ 146 Finance receivables as of March 31, 2020 collectively evaluated for impairment (3) $ 1,866 $ 289 $ 1,132 $ 3,287 _____________ (1) Includes developing market countries. (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 $135 and $146 at March 31, 2021 and 2020, respectively. 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 primarily includes leases originated through our XBS sales channel that utilizes a combination of internal and third party leasing in its lease arrangements with end customers. Indirect also includes lease financing to end-user customers who purchased equipment we sold to distributors or resellers. We evaluate our customers based on the following credit quality indicators: • Low Credit Risk: 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 & Poor's (S&P) rating of BBB- or better. Loss rates in this category in the normal course are generally less than 1%. • Average Credit Risk: 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 in the normal course are generally in the range of 2% to 5%. • High Credit Risk: 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 low and average credit risk 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 in the normal course are generally in the range of 7% to 10%. Credit quality indicators are updated at least annually, or more frequently to the extent required by economic conditions, 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, origination year and credit quality indicators are as follows: March 31, 2021 2021 2020 2019 2018 2017 Prior Total United States (Direct): Low Credit Risk $ 46 $ 154 $ 134 $ 111 $ 56 $ 21 $ 522 Average Credit Risk 17 53 89 43 20 6 228 High Credit Risk 18 87 39 24 12 5 185 Total $ 81 $ 294 $ 262 $ 178 $ 88 $ 32 $ 935 United States (Indirect): Low Credit Risk $ 57 $ 194 $ 140 $ 69 $ 26 $ 4 $ 490 Average Credit Risk 42 110 99 56 24 5 336 High Credit Risk 9 16 8 8 3 1 45 Total $ 108 $ 320 $ 247 $ 133 $ 53 $ 10 $ 871 Canada Low Credit Risk $ 11 $ 36 $ 31 $ 21 $ 7 $ 3 $ 109 Average Credit Risk 10 44 36 23 15 4 132 High Credit Risk 3 16 10 9 7 2 47 Total $ 24 $ 96 $ 77 $ 53 $ 29 $ 9 $ 288 EMEA (1) Low Credit Risk $ 65 $ 176 $ 156 $ 109 $ 46 $ 14 $ 566 Average Credit Risk 52 153 138 89 38 12 482 High Credit Risk 7 19 21 12 8 3 70 Total $ 124 $ 348 $ 315 $ 210 $ 92 $ 29 $ 1,118 Total Finance Receivables Low Credit Risk $ 179 $ 560 $ 461 $ 310 $ 135 $ 42 $ 1,687 Average Credit Risk 121 360 362 211 97 27 1,178 High Credit Risk 37 138 78 53 30 11 347 Total $ 337 $ 1,058 $ 901 $ 574 $ 262 $ 80 $ 3,212 December 31, 2020 2020 2019 2018 2017 2016 Prior Total United States (Direct): Low Credit Risk $ 164 $ 151 $ 128 $ 71 $ 32 $ 4 $ 550 Average Credit Risk 54 95 52 26 8 2 237 High Credit Risk 90 42 27 13 5 3 180 Total $ 308 $ 288 $ 207 $ 110 $ 45 $ 9 $ 967 United States (Indirect): Low Credit Risk $ 193 $ 140 $ 79 $ 33 $ 7 $ — $ 452 Average Credit Risk 129 124 71 31 8 — 363 High Credit Risk 19 9 9 3 1 — 41 Total $ 341 $ 273 $ 159 $ 67 $ 16 $ — $ 856 Canada Low Credit Risk $ 37 $ 34 $ 24 $ 10 $ 5 $ 1 $ 111 Average Credit Risk 46 39 26 17 6 1 135 High Credit Risk 18 10 10 10 3 — 51 Total $ 101 $ 83 $ 60 $ 37 $ 14 $ 2 $ 297 EMEA (1) Low Credit Risk $ 197 $ 177 $ 131 $ 62 $ 20 $ 4 $ 591 Average Credit Risk 170 160 108 51 17 4 510 High Credit Risk 23 24 15 10 4 1 77 Total $ 390 $ 361 $ 254 $ 123 $ 41 $ 9 $ 1,178 Total Finance Receivables Low Credit Risk $ 591 $ 502 $ 362 $ 176 $ 64 $ 9 $ 1,704 Average Credit Risk 399 418 257 125 39 7 1,245 High Credit Risk 150 85 61 36 13 4 349 Total $ 1,140 $ 1,005 $ 680 $ 337 $ 116 $ 20 $ 3,298 _____________ (1) Includes developing market countries. 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: March 31, 2021 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Direct $ 30 $ 7 $ 8 $ 45 $ 890 $ 935 $ 70 Indirect 18 4 3 25 846 871 — Total United States 48 11 11 70 1,736 1,806 70 Canada 6 2 1 9 279 288 13 EMEA (1) 12 3 2 17 1,101 1,118 17 Total $ 66 $ 16 $ 14 $ 96 $ 3,116 $ 3,212 $ 100 December 31, 2020 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Direct $ 33 $ 6 $ 9 $ 48 $ 919 $ 967 $ 74 Indirect 21 4 3 28 828 856 — Total United States 54 10 12 76 1,747 1,823 74 Canada 8 2 — 10 287 297 12 EMEA (1) 12 3 2 17 1,161 1,178 23 Total $ 74 $ 15 $ 14 $ 103 $ 3,195 $ 3,298 $ 109 _____________ (1) Includes developing market countries Secured Borrowings and Collateral In July 2020, we sold $355 of U.S. based finance receivables to a consolidated special purpose entity (SPE), which funded the purchase through a secured loan agreement with a financial institution. As of March 31, 2021 the SPE holds $248 of total Finance receivables, net, which are included in our Condensed Consolidated Balance Sheet as collateral for the secured loan agreement. In December 2020, we sold $610 of U.S. based finance receivables to a consolidated SPE, which funded the purchase through a secured loan agreement with a financial institution. As of March 31, 2021 the SPE holds $543 of total Finance receivables, net, which are included in our Condensed Consolidated Balance Sheet as collateral for the secured loan agreement. Refer to Note 11 - Debt, for additional information related to this arrangement including the related secured loan agreement. |
Finance Receivables, Net
Finance Receivables, Net | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Finance Receivables, Net | Accounts Receivable, Net Accounts receivable, net were as follows: March 31, December 31, Invoiced $ 637 $ 735 Accrued (1) 212 217 Allowance for doubtful accounts (68) (69) Accounts receivable, net $ 781 $ 883 _____________ (1) Accrued receivables include amounts to be invoiced in the subsequent quarter for current services provided. The allowance for doubtful accounts was as follows: 2021 2020 Balance at December 31 st $ 69 $ 55 Provision 4 8 Charge-offs (5) (2) Recoveries and other (1) — (1) Balance at March 31 st $ 68 $ 60 _____________ (1) 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. 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 based on an assessment of past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends. Based on that assessment the allowance for doubtful accounts as a percent of gross accounts receivable was 8.0% at March 31, 2021 and 7.2% at December 31, 2020. The allowance for doubtful accounts as a percent of gross accounts receivable remain at an elevated level as compared to historical levels primarily as a result of the macroeconomic and market disruption caused by COVID-19. 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, $93 and $136 remained uncollected as of March 31, 2021 and December 31, 2020, respectively. Accounts receivable sales activity was as follows: Three Months Ended 2021 2020 Accounts receivable sales (1) $ 107 $ 53 ____________ (1) Losses on sales were not material. 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. 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 assets. Finance receivables, net were as follows: March 31, December 31, Gross receivables $ 3,596 $ 3,691 Unearned income (384) (393) Subtotal 3,212 3,298 Residual values — — Allowance for doubtful accounts (135) (133) Finance receivables, net 3,077 3,165 Less: Billed portion of finance receivables, net 92 99 Less: Current portion of finance receivables not billed, net 1,065 1,082 Finance receivables due after one year, net $ 1,920 $ 1,984 Finance Receivables – Allowance for Credit Losses and Credit Quality Our finance receivable portfolios are primarily in the U.S., Canada and EMEA. 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 credit losses is determined principally based on an assessment of origination year and past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends. Based on that assessment the allowance for doubtful credit losses as a percentage of gross finance receivables (net of unearned income) was 4.2% at March 31, 2021 and 4.0% at December 31, 2020. In determining the level of reserve required we had to critically assess current and forecasted economic conditions in light of the COVID-19 pandemic to ensure we objectively included those expected impacts in the determination of our reserve. Our assessment also included a review of current portfolio credit metrics and the level of write-offs incurred over the past year of the COVID-19 pandemic. 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 projected loss rates are primarily based upon historical loss experience adjusted for judgments about the probable effects of relevant observable data including current and future 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 Since our allowance for doubtful finance receivables is effectively determined by geography, the risk characteristics in our finance receivable portfolio segments will generally be consistent with the risk factors associated with the economies of the countries/regions included in those geographies. Since EMEA is comprised of various countries and regional economies, the risk profile within that portfolio segment is somewhat more diversified due to the varying economic conditions among and within the countries. The first quarter 2020 reflected an incremental $60 provision to cover estimated write-offs on our finance receivable portfolio from the economic disruption caused by the COVID-19 pandemic. Subsequent to the first quarter of 2020 provision and through the first quarter of 2021, actual write-offs incurred to date have lagged expectations but remain in line with our original projections over the life of the lease portfolio and consistent with future expectations regarding our estimated impacts from the COVID-19 pandemic. Accordingly, our total reserve as a percent of receivables has remained fairly consistent subsequent to the first quarter 2020 charge at around 4%. The allowance for doubtful accounts as well as the related investment in finance receivables were as follows: United States Canada EMEA (1) Total Balance at December 31, 2020 $ 77 $ 15 $ 41 $ 133 Provision 2 1 3 6 Charge-offs (2) — (1) (3) Recoveries and other (2) 1 — (2) (1) Balance at March 31, 2021 $ 78 $ 16 $ 41 $ 135 Finance receivables as of March 31, 2021 collectively evaluated for impairment (3) $ 1,806 $ 288 $ 1,118 $ 3,212 Balance at December 31, 2019 $ 59 $ 10 $ 20 $ 89 Provision 35 6 25 66 Charge-offs (3) (1) (4) (8) Recoveries and other (2) — — (1) (1) Balance at March 31, 2020 $ 91 $ 15 $ 40 $ 146 Finance receivables as of March 31, 2020 collectively evaluated for impairment (3) $ 1,866 $ 289 $ 1,132 $ 3,287 _____________ (1) Includes developing market countries. (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 $135 and $146 at March 31, 2021 and 2020, respectively. 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 primarily includes leases originated through our XBS sales channel that utilizes a combination of internal and third party leasing in its lease arrangements with end customers. Indirect also includes lease financing to end-user customers who purchased equipment we sold to distributors or resellers. We evaluate our customers based on the following credit quality indicators: • Low Credit Risk: 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 & Poor's (S&P) rating of BBB- or better. Loss rates in this category in the normal course are generally less than 1%. • Average Credit Risk: 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 in the normal course are generally in the range of 2% to 5%. • High Credit Risk: 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 low and average credit risk 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 in the normal course are generally in the range of 7% to 10%. Credit quality indicators are updated at least annually, or more frequently to the extent required by economic conditions, 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, origination year and credit quality indicators are as follows: March 31, 2021 2021 2020 2019 2018 2017 Prior Total United States (Direct): Low Credit Risk $ 46 $ 154 $ 134 $ 111 $ 56 $ 21 $ 522 Average Credit Risk 17 53 89 43 20 6 228 High Credit Risk 18 87 39 24 12 5 185 Total $ 81 $ 294 $ 262 $ 178 $ 88 $ 32 $ 935 United States (Indirect): Low Credit Risk $ 57 $ 194 $ 140 $ 69 $ 26 $ 4 $ 490 Average Credit Risk 42 110 99 56 24 5 336 High Credit Risk 9 16 8 8 3 1 45 Total $ 108 $ 320 $ 247 $ 133 $ 53 $ 10 $ 871 Canada Low Credit Risk $ 11 $ 36 $ 31 $ 21 $ 7 $ 3 $ 109 Average Credit Risk 10 44 36 23 15 4 132 High Credit Risk 3 16 10 9 7 2 47 Total $ 24 $ 96 $ 77 $ 53 $ 29 $ 9 $ 288 EMEA (1) Low Credit Risk $ 65 $ 176 $ 156 $ 109 $ 46 $ 14 $ 566 Average Credit Risk 52 153 138 89 38 12 482 High Credit Risk 7 19 21 12 8 3 70 Total $ 124 $ 348 $ 315 $ 210 $ 92 $ 29 $ 1,118 Total Finance Receivables Low Credit Risk $ 179 $ 560 $ 461 $ 310 $ 135 $ 42 $ 1,687 Average Credit Risk 121 360 362 211 97 27 1,178 High Credit Risk 37 138 78 53 30 11 347 Total $ 337 $ 1,058 $ 901 $ 574 $ 262 $ 80 $ 3,212 December 31, 2020 2020 2019 2018 2017 2016 Prior Total United States (Direct): Low Credit Risk $ 164 $ 151 $ 128 $ 71 $ 32 $ 4 $ 550 Average Credit Risk 54 95 52 26 8 2 237 High Credit Risk 90 42 27 13 5 3 180 Total $ 308 $ 288 $ 207 $ 110 $ 45 $ 9 $ 967 United States (Indirect): Low Credit Risk $ 193 $ 140 $ 79 $ 33 $ 7 $ — $ 452 Average Credit Risk 129 124 71 31 8 — 363 High Credit Risk 19 9 9 3 1 — 41 Total $ 341 $ 273 $ 159 $ 67 $ 16 $ — $ 856 Canada Low Credit Risk $ 37 $ 34 $ 24 $ 10 $ 5 $ 1 $ 111 Average Credit Risk 46 39 26 17 6 1 135 High Credit Risk 18 10 10 10 3 — 51 Total $ 101 $ 83 $ 60 $ 37 $ 14 $ 2 $ 297 EMEA (1) Low Credit Risk $ 197 $ 177 $ 131 $ 62 $ 20 $ 4 $ 591 Average Credit Risk 170 160 108 51 17 4 510 High Credit Risk 23 24 15 10 4 1 77 Total $ 390 $ 361 $ 254 $ 123 $ 41 $ 9 $ 1,178 Total Finance Receivables Low Credit Risk $ 591 $ 502 $ 362 $ 176 $ 64 $ 9 $ 1,704 Average Credit Risk 399 418 257 125 39 7 1,245 High Credit Risk 150 85 61 36 13 4 349 Total $ 1,140 $ 1,005 $ 680 $ 337 $ 116 $ 20 $ 3,298 _____________ (1) Includes developing market countries. 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: March 31, 2021 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Direct $ 30 $ 7 $ 8 $ 45 $ 890 $ 935 $ 70 Indirect 18 4 3 25 846 871 — Total United States 48 11 11 70 1,736 1,806 70 Canada 6 2 1 9 279 288 13 EMEA (1) 12 3 2 17 1,101 1,118 17 Total $ 66 $ 16 $ 14 $ 96 $ 3,116 $ 3,212 $ 100 December 31, 2020 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Direct $ 33 $ 6 $ 9 $ 48 $ 919 $ 967 $ 74 Indirect 21 4 3 28 828 856 — Total United States 54 10 12 76 1,747 1,823 74 Canada 8 2 — 10 287 297 12 EMEA (1) 12 3 2 17 1,161 1,178 23 Total $ 74 $ 15 $ 14 $ 103 $ 3,195 $ 3,298 $ 109 _____________ (1) Includes developing market countries Secured Borrowings and Collateral In July 2020, we sold $355 of U.S. based finance receivables to a consolidated special purpose entity (SPE), which funded the purchase through a secured loan agreement with a financial institution. As of March 31, 2021 the SPE holds $248 of total Finance receivables, net, which are included in our Condensed Consolidated Balance Sheet as collateral for the secured loan agreement. In December 2020, we sold $610 of U.S. based finance receivables to a consolidated SPE, which funded the purchase through a secured loan agreement with a financial institution. As of March 31, 2021 the SPE holds $543 of total Finance receivables, net, which are included in our Condensed Consolidated Balance Sheet as collateral for the secured loan agreement. Refer to Note 11 - Debt, for additional information related to this arrangement including the related secured loan agreement. |
Inventories and Equipment on Op
Inventories and Equipment on Operating Leases, Net | 3 Months Ended |
Mar. 31, 2021 | |
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: March 31, December 31, Finished goods $ 697 $ 707 Work-in-process 48 43 Raw materials 96 93 Total Inventories $ 841 $ 843 The transfer of equipment from our inventories to equipment subject to an operating lease is presented in our Condensed 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. Equipment on operating leases and the related accumulated depreciation were as follows: March 31, December 31, Equipment on operating leases $ 1,332 $ 1,376 Accumulated depreciation (1,055) (1,080) Equipment on operating leases, net $ 277 $ 296 |
Lessee
Lessee | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lessee | Lessee 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 twelve years and a variety of renewal and/or termination options. The components of lease expense are as follows: Three Months Ended 2021 2020 Operating lease expense $ 27 $ 28 Short-term lease expense 5 5 Variable lease expense (1) 12 12 Sublease income (1) — Total Lease expense $ 43 $ 45 _____________ (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 March 31, 2021, we have one additional real estate operating lease that has not yet commenced. This operating lease has an obligation and corresponding right-of-use (ROU) asset of $8 and commenced in April 2021 with a lease term of approximately 6 years and a one-time option to terminate the lease after 3 years. Operating lease ROU assets, net and operating lease liabilities were reported in the Condensed Consolidated Balance Sheets as follows: March 31, December 31, Other long-term assets $ 287 $ 310 Accrued expenses and other current liabilities $ 79 $ 83 Other long-term liabilities 231 250 Total Operating lease liabilities $ 310 $ 333 |
Restructuring Programs
Restructuring Programs | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Programs | Restructuring Programs We engage in restructuring actions through 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, as well as reducing our real estate footprint. During the three months ended March 31, 2021, we recorded net restructuring and asset impairment charges of $21, which included $14 of severance costs related to headcount reductions of approximately 350 employees worldwide, $1 of other contractual termination costs and $10 of asset impairment charges. These costs were partially offset by $4 of net reversals, primarily resulting from changes in estimated reserves from prior period initiatives. Information related to restructuring program activity is outlined below: Severance and Related Costs Other Contractual Termination Costs (2) Asset Impairments (3) Total Balance at December 31, 2020 $ 78 $ 4 $ — $ 82 Provision 14 1 10 25 Reversals (4) — — (4) Net current period charges (1) 10 1 10 21 Charges against reserve and currency (29) (1) (10) (40) Balance at March 31, 2021 $ 59 $ 4 $ — $ 63 _____________ _ (1) Represents net amount recognized within the Condensed Consolidated Statements of Income (Loss) for the period 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) Primarily relates to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $1 for leased ROU assets and $9 for owned assets upon exit from the facilities, net of any potential sublease income and other recoveries, including potential sales, in the first quarter of 2021. The following table summarizes the reconciliation to the Condensed Consolidated Statements of Cash Flows: Three Months Ended 2021 2020 Charges against reserve and currency $ (40) $ (35) Effects of foreign currency and other non-cash items 13 — Restructuring cash payments $ (27) $ (35) In connection with our restructuring programs, we also incurred certain related costs as follows: Three Months Ended 2021 2020 Retention related severance/bonuses (1) $ (4) $ 7 Contractual severance costs — 4 Consulting and other costs (2) — 1 Total $ (4) $ 12 ____________ _ (1) Includes retention related severance and bonuses for employees expected to continue working beyond their minimum notification period before termination. The credit of $4 in the first quarter 2021 reflects a change in estimate. (2) Represents professional support services associated with our business transformation initiatives. Cash paid for restructuring related costs were approximately $3 and $0 for the three months ended March 31, 2021 and 2020, respectively, while the reserve was $13 and $21 at March 31, 2021 and December 31, 2020. The balance at March 31, 2021 is expected to be paid over the next twelve months. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Xerox Holdings Corporation / Xerox Corporation Intercompany Loan In August 2020, Xerox Holdings Corporation issued $550 of 5.00% Senior Notes due August 2025 (the "2025 Senior Notes") at par and $550 of 5.50% Senior Notes due August 2028 (the "2028 Senior Notes") at par resulting in aggregate net proceeds (after fees and expenses) of approximately $1,089. On August 24, 2020, Xerox Holdings Corporation issued an additional $200 of the 2025 Senior Notes at 100.75% of par and an additional $200 of the 2028 Senior Notes at 102.50% of par resulting in additional aggregate net proceeds (after premium, fees and expenses) of approximately $405 for total aggregate net proceeds from both issuances of approximately $1,494. In 2020, the net debt proceeds were contributed by Xerox Holdings Corporation to Xerox Corporation and recorded as Additional paid-in capital by Xerox Corporation. In February 2021, Xerox Holdings Corporation and Xerox Corporation entered into an Intercompany Loan agreement for the net proceeds of $1,494 contributed by Xerox Holdings Corporation to Xerox Corporation in 2020. The intercompany loan, which did not involve the exchange of cash in the current period, resulted in the capitalization of the amount as Related Party Debt for Xerox Corporation as of March 31, 2021. The amount was originally recorded as Additional paid-in capital in 2020 when the cash was contributed by Xerox Holdings Corporation. The intercompany loan was established to mirror the terms included in Xerox Holdings Corporation’s 2025 and 2028 Senior Notes, including interest rates and payment dates. The intercompany interest expense also includes a ratable amount to reimburse Xerox Holdings Corporation for its debt issuance costs and premium. At March 31, 2021, the balance of the Intercompany Loan reported in Xerox Corporation’s Condensed Consolidated Balance Sheet was $1,494, which is net of related debt issuance costs, and the intercompany interest payable was $10. Xerox Corporation’s interest expense for the three months ended March 31, 2021 included $20 of interest expense associated with this Intercompany Loan. Secured Borrowings and Collateral In July 2020, we entered into a secured loan agreement with a financial institution where we sold $355 of U.S. based finance receivables and the rights to payments under operating leases with an equipment net book value of $10 to a special purpose entity (SPE). The purchase by the SPE was funded through an amortizing secured loan to the SPE from the financial institution of $340. The debt has a variable interest rate based on LIBOR plus a spread (current rate of 1.69% at March 31, 2021). In December 2020, we entered into a second secured loan agreement with a financial institution where we sold $610 of U.S. based finance receivables to an SPE. The purchase by the SPE was funded through an amortizing secured loan to the SPE from the financial institution of $500. The debt has a variable interest rate based on the financial institution's cost of funds plus a spread (current rate of 1.73% at March 31, 2021). Below are the assets and liabilities held by the consolidated SPEs, which are included in our Condensed Consolidated Balance Sheets. As a result of the above sales, the assets of the SPEs are not available to satisfy any of our other obligations. Conversely, the credit holders of these SPEs borrowings do not have legal recourse to the Company’s general credit or other assets. March 31, December 31, Assets held by SPEs Billed portion of finance receivables, net $ 25 $ 28 Finance receivables, net 326 350 Finance receivables due after one year, net 440 510 Equipment on operating leases, net 6 8 Restricted cash (1) 43 22 Total Assets $ 840 $ 918 Liabilities held by SPEs Current portion of long-term debt, net (2) $ 380 $ 394 Long term debt, net (2) 290 370 Total Liabilities $ 670 $ 764 ____________ _ (1) Restricted cash is included in Other current assets in our Condensed Consolidated Balance Sheet. (2) Net of debt issuance costs of $3. Interest Expense and Income Interest expense and income were as follows: Three Months Ended 2021 2020 Interest expense (1)(2) $ 52 $ 51 Interest income (3) 56 67 ____________ _ (1) Includes Cost of financing as well as non-financing interest expense that is included in Other expenses, net in the Condensed Consolidated Statements of Income (Loss). (2) Interest expense for the three month ended March 31, 2021 for Xerox Corporation includes $20 of intercompany interest expense for the Xerox Holdings Corporation / Xerox Corporation Intercompany Loan. (3) Includes Financing revenue as well as other interest income that is included in Other expenses, net in the Condensed Consolidated Statements of Income (Loss). |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments Interest Rate Risk Management We use interest rate swap and interest rate cap 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. At March 31, 2021 there were no material interest rate derivative contracts outstanding. 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 March 31, 2021 and December 31, 2020, we had outstanding forward exchange and purchased option contracts with gross notional values of $968 and $1,161 respectively, with terms of less than 12 months. Approximately 78% of the contracts at March 31, 2021 mature within three months, 11% mature in three to six months and 11% in six to twelve months. The decrease in hedge position from December 31, 2020 is primarily for GBP and YEN exposures due to lower requirements. There has not been any material change in our hedging strategy. 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. The net (liability) asset fair value of these contracts were $(7) and $2 as of March 31, 2021 and December 31, 2020, respectively. Summary of Derivative Instruments Fair Value The following table provides a summary of the fair value amounts of our derivative instruments: Designation of Derivatives Balance Sheet Location March 31, December 31, Derivatives Designated as Hedging Instruments Foreign exchange contracts - forwards Other current assets $ 1 $ 3 Accrued expenses and other current liabilities (8) (2) Foreign currency options Other current assets — 1 Net designated derivative (liability) asset $ (7) $ 2 Derivatives NOT Designated as Hedging Instruments Foreign exchange contracts – forwards Other current assets $ 3 $ 3 Accrued expenses and other current liabilities (6) (3) Net undesignated derivative liability $ (3) $ — Summary of Derivatives Total Derivative assets $ 4 $ 7 Total Derivative liabilities (14) (5) Net Derivative (liability) asset $ (10) $ 2 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 (losses). Designated Derivative Instruments Gains (Losses) The following table provides a summary of gains (losses) on derivative instruments: Three Months Ended Gain (Loss) on Derivative Instruments 2021 2020 Fair Value Hedges - Interest Rate Contracts Derivative loss recognized in interest expense $ — $ (1) Hedged item gain recognized in interest expense — 1 Cash Flow Hedges - Foreign Exchange Forward Contracts and Options Derivative (loss) gain recognized in OCI (effective portion) $ (10) $ 7 Derivative loss reclassified from AOCL to income - Cost of sales (effective portion) (1) (1) During the three months ended March 31, 2021 and 2020, no amount of ineffectiveness was recorded in the Condensed Consolidated Statements of Income (Loss) for these designated cash flow hedges and 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. As of March 31, 2021, a net after-tax loss of $5 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 and (losses) on non-designated derivative instruments: Derivatives NOT Designated as Hedging Instruments Location of Derivative (Loss) Gain Three Months Ended 2021 2020 Foreign exchange contracts – forwards Other expense – Currency (losses) gains, net $ (18) $ 14 For the three months ended March 31, 2021 and 2020 currency losses, net were $2 and $2, 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 | 3 Months Ended |
Mar. 31, 2021 | |
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 measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs. March 31, December 31, Assets Foreign exchange contracts - forwards $ 4 $ 6 Foreign currency options — 1 Deferred compensation plan investments in mutual funds 17 18 Total $ 21 $ 25 Liabilities Foreign exchange contracts - forwards $ 14 $ 5 Deferred compensation plan liabilities 17 17 Total $ 31 $ 22 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: March 31, 2021 December 31, 2020 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 2,379 $ 2,379 $ 2,625 $ 2,625 Accounts receivable, net 781 781 883 883 Short-term debt and current portion of long-term debt 678 688 394 396 Long-term Debt Xerox Holdings Corporation 1,494 1,558 1,493 1,596 Xerox Corporation 1,890 1,992 2,187 2,298 Xerox - Other Subsidiaries (1) 290 292 370 372 Long-term debt $ 3,674 $ 3,842 $ 4,050 $ 4,266 ____________ _ (1) Represents subsidiaries of Xerox Corporation 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 | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows: Three Months Ended March 31, Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health Components of Net Periodic Benefit Costs: 2021 2020 2021 2020 2021 2020 Service cost $ — $ 1 $ 5 $ 5 $ 1 $ 1 Interest cost 18 23 22 29 2 2 Expected return on plan assets (28) (26) (52) (47) — — Recognized net actuarial loss 5 7 15 14 — — Amortization of prior service credit — — — — (17) (19) Recognized settlement loss 15 19 — — — — Recognized curtailment gain — — — (1) — — Defined benefit plans 10 24 (10) — (14) (16) Defined contribution plans — 5 5 5 n/a n/a Net Periodic Benefit Cost (Credit) 10 29 (5) 5 (14) (16) Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss): Net actuarial (gain) loss (1) (44) 12 1 — — — Amortization of net actuarial loss (20) (26) (15) (14) — — Amortization of prior service credit — — — — 17 19 Total Recognized in Other Comprehensive Income (Loss) (2) (64) (14) (14) (14) 17 19 Total Recognized in Net Periodic Benefit (Credit) Cost and Other Comprehensive Income (Loss) $ (54) $ 15 $ (19) $ (9) $ 3 $ 3 _____________ (1) The net actuarial (gain) loss for U.S. Plans primarily reflects the remeasurement of our primary U.S. pension plans as a result of the payment of periodic settlements. (2) Amounts represent the pre-tax effect included within Other Comprehensive Income (Loss). Refer to Note 17 - Other Comprehensive Income (Loss) for related tax effects and the after-tax amounts. Contributions The following table summarizes cash contributions to our defined benefit pension plans and retiree health benefit plans. Three Months Ended Year Ended December 31, 2021 2020 Estimated 2021 2020 U.S. plans $ 6 $ 6 $ 25 $ 35 Non-U.S. plans 29 27 105 104 Total Pension $ 35 $ 33 $ 130 $ 139 Retiree Health $ 6 $ 5 $ 30 $ 25 There are no mandatory contributions required in 2021 for our U.S. tax-qualified defined benefit plans to meet the minimum funding requirements. Defined Contribution Plans In the first quarter 2021, the Company temporarily suspended and will not make its full year 2021 employer match/contribution for its U.S. based 401(k) saving plans for salaried employees. The suspension is expected to result in savings of approximately $20 for the year ending December 31, 2021. |
Shareholders' Equity of Xerox H
Shareholders' Equity of Xerox Holdings | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity of Xerox Holdings | Shareholders’ Equity of Xerox Holdings (shares in thousands) The shareholders' equity information presented below reflects the consolidated activity of Xerox Holdings. Common Stock (1) Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (2) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2020 $ 198 $ 2,445 $ — $ 6,281 $ (3,332) $ 5,592 $ 4 $ 5,596 Comprehensive income (loss), net — — — 39 (3) 36 — 36 Cash dividends declared - common (3) — — — (49) — (49) — (49) Cash dividends declared - preferred (4) — — — (4) — (4) — (4) Stock option and incentive plans, net 1 11 — — — 12 — 12 Payments to acquire treasury stock, including fees — — (162) — — (162) — (162) Balance at March 31, 2021 $ 199 $ 2,456 $ (162) $ 6,267 $ (3,335) $ 5,425 $ 4 $ 5,429 Common Stock (1) Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (2) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2019 $ 215 $ 2,782 $ (76) $ 6,312 $ (3,646) $ 5,587 $ 7 $ 5,594 Comprehensive loss, net — — — (2) (138) (140) — (140) Cash dividends declared - common (3) — — — (54) — (54) — (54) Cash dividends declared - preferred (4) — — — (4) — (4) — (4) Stock option and incentive plans, net — 4 — — — 4 — 4 Cancellation of treasury stock (2) (74) 76 — — — — — Balance at March 31, 2020 $ 213 $ 2,712 $ — $ 6,252 $ (3,784) $ 5,393 $ 7 $ 5,400 _____________ (1) Common Stock has a par value of $1 per share. (2) Refer to Note 17 - Other Comprehensive Income (Loss) for the components of AOCL. (3) Cash dividends declared on common stock for the three months ended March 31, 2021 and 2020 were $0.25 per share, respectively. (4) Cash dividends declared on preferred stock for the three months ended March 31, 2021 and 2020 were $20.00 per share, respectively. Treasury Stock The following is a summary of the purchases of common stock during 2021: Shares Amount Balance at December 31, 2020 — $ — Purchases (1) 6,704 162 Cancellations — — Balance at March 31, 2021 6,704 $ 162 _____________ (1) Includes associated fees. |
Shareholders' Equity of Xerox
Shareholders' Equity of Xerox | 3 Months Ended |
Mar. 31, 2021 | |
Shareholders' Equity of Xerox | Shareholders’ Equity of Xerox Holdings (shares in thousands) The shareholders' equity information presented below reflects the consolidated activity of Xerox Holdings. Common Stock (1) Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (2) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2020 $ 198 $ 2,445 $ — $ 6,281 $ (3,332) $ 5,592 $ 4 $ 5,596 Comprehensive income (loss), net — — — 39 (3) 36 — 36 Cash dividends declared - common (3) — — — (49) — (49) — (49) Cash dividends declared - preferred (4) — — — (4) — (4) — (4) Stock option and incentive plans, net 1 11 — — — 12 — 12 Payments to acquire treasury stock, including fees — — (162) — — (162) — (162) Balance at March 31, 2021 $ 199 $ 2,456 $ (162) $ 6,267 $ (3,335) $ 5,425 $ 4 $ 5,429 Common Stock (1) Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (2) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2019 $ 215 $ 2,782 $ (76) $ 6,312 $ (3,646) $ 5,587 $ 7 $ 5,594 Comprehensive loss, net — — — (2) (138) (140) — (140) Cash dividends declared - common (3) — — — (54) — (54) — (54) Cash dividends declared - preferred (4) — — — (4) — (4) — (4) Stock option and incentive plans, net — 4 — — — 4 — 4 Cancellation of treasury stock (2) (74) 76 — — — — — Balance at March 31, 2020 $ 213 $ 2,712 $ — $ 6,252 $ (3,784) $ 5,393 $ 7 $ 5,400 _____________ (1) Common Stock has a par value of $1 per share. (2) Refer to Note 17 - Other Comprehensive Income (Loss) for the components of AOCL. (3) Cash dividends declared on common stock for the three months ended March 31, 2021 and 2020 were $0.25 per share, respectively. (4) Cash dividends declared on preferred stock for the three months ended March 31, 2021 and 2020 were $20.00 per share, respectively. Treasury Stock The following is a summary of the purchases of common stock during 2021: Shares Amount Balance at December 31, 2020 — $ — Purchases (1) 6,704 162 Cancellations — — Balance at March 31, 2021 6,704 $ 162 _____________ (1) Includes associated fees. |
XEROX CORPORATION | |
Shareholders' Equity of Xerox | Shareholder's Equity of Xerox The shareholder's equity information presented below reflects the consolidated activity of Xerox. Additional Paid-in Capital Retained Earnings AOCL (1) Xerox Non-controlling Interests Total Equity Balance at December 31, 2020 $ 4,879 $ 5,834 $ (3,332) $ 7,381 $ 4 $ 7,385 Comprehensive income (loss), net — 41 (3) 38 — 38 Dividends declared to parent — (201) — (201) — (201) Intercompany loan capitalization (2) (1,494) — — (1,494) — (1,494) Transfers to parent (34) — — (34) — (34) Balance at March 31, 2021 $ 3,351 $ 5,674 $ (3,335) $ 5,690 $ 4 $ 5,694 Additional Paid-in Capital Retained Earnings AOCL (1) Xerox Non-controlling Interests Total Equity Balance at December 31, 2019 $ 3,266 $ 6,247 $ (3,646) $ 5,867 $ 7 $ 5,874 Comprehensive loss, net — (2) (138) (140) — (140) Dividends declared to parent — (290) — (290) — (290) Transfers from parent 238 — — 238 — 238 Balance at March 31, 2020 $ 3,504 $ 5,955 $ (3,784) $ 5,675 $ 7 $ 5,682 _____________ (1) Refer to Note 17 - Other Comprehensive Income (Loss) for the components of AOCL. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Other Comprehensive Income (Loss) is comprised of the following: Three Months Ended 2021 2020 Pre-tax Net of Tax Pre-tax Net of Tax Translation Adjustments Losses $ (52) $ (51) $ (204) $ (197) Unrealized (Losses) Gains Changes in fair value of cash flow hedges (losses) gains (10) (8) 7 4 Changes in cash flow hedges reclassed to earnings (1) 1 1 1 1 Net Unrealized (Losses) Gains (9) (7) 8 5 Defined Benefit Plans Gains (Losses) Net actuarial/prior service gains (losses) 43 32 (12) (9) Prior service amortization (2) (17) (12) (19) (14) Actuarial loss amortization/settlement (2) 35 26 40 30 Other gains (3) 9 9 47 47 Changes in Defined Benefit Plans Gains 70 55 56 54 Other Comprehensive Income (Loss) Attributable to Xerox Holdings/Xerox $ 9 $ (3) $ (140) $ (138) ____________ (1) Reclassified to Cost of sales - refer to Note 12 - Financial Instruments for additional information regarding our cash flow hedges. (2) Reclassified to Total Net Periodic Benefit Cost - refer to Note 14 - Employee Benefit Plans for additional information. (3) 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: March 31, December 31, Cumulative translation adjustments $ (1,771) $ (1,720) Other unrealized (losses) gains, net (5) 2 Benefit plans net actuarial losses and prior service credits (1,559) (1,614) Total Accumulated Other Comprehensive Loss Attributable to Xerox Holdings/Xerox $ (3,335) $ (3,332) |
Earnings_(Loss) per Share
Earnings (Loss) per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | Earnings (Loss) per Share (shares in thousands) The following table sets forth the computation of basic and diluted earnings (loss) per share of Xerox Holdings Corporation's common stock: Three Months Ended 2021 2020 Basic Earnings (Loss) per Share Net Income (Loss) Attributable to Xerox Holdings $ 39 $ (2) Accrued dividends on preferred stock (4) (4) Adjusted Net income (loss) available to common shareholders $ 35 $ (6) Weighted average common shares outstanding 195,985 212,750 Basic Earnings (Loss) per Share $ 0.18 $ (0.03) Diluted Earnings (Loss) per Share Net Income (Loss) Attributable to Xerox Holdings $ 39 $ (2) Accrued dividends on preferred stock (4) (4) Adjusted Net income (loss) available to common shareholders $ 35 $ (6) Weighted average common shares outstanding 195,985 212,750 Common shares issuable with respect to: Stock options — — Restricted stock and performance shares 2,181 — Convertible preferred stock — — Adjusted weighted average common shares outstanding 198,166 212,750 Diluted Earnings (Loss) per Share $ 0.18 $ (0.03) 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: Stock options 693 849 Restricted stock and performance shares 5,327 6,478 Convertible preferred stock 6,742 6,742 Total Anti-Dilutive Securities 12,762 14,069 Dividends per Common Share $ 0.25 $ 0.25 |
Contingencies and Litigation
Contingencies and Litigation | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Litigation | Contingencies and Litigation Legal Matters 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. Brazil Contingencies Our Brazilian operations have received or been the subject of numerous governmental assessments related to indirect and other taxes. The 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: March 31, December 31, Tax contingency - unreserved $ 335 $ 355 Escrow cash deposits 35 39 Surety bonds 96 112 Letters of credit 72 78 Liens on Brazilian assets — — The decrease in the unreserved portion of the tax contingency, inclusive of any related interest, was primarily related to currency, partially offset by interest. 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 March 31, 2021 and December 31, 2020. We routinely assess all these matters as to the 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. 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 Joseph J. Echevarria, Cheryl Gordon Krongard, 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, Stephen H. Rusckowski, Gregory Q. Brown, and Sara Martinez Tucker. 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 ( "Ribbe I" ). The new complaint included putative derivative claims on behalf of Xerox for breach of fiduciary duty against the then members of the Xerox Board who approved Xerox’s entry into agreements to settle shareholder actions filed in 2018 in the same court against Xerox, its then directors, and FUJIFILM Holdings Corporation (“Fujifilm”) in connection with a proposed transaction announced in January 2018 to combine Xerox and Fuji Xerox (the “Fuji Transaction”), including a consolidated putative class action, In re Xerox Corporation Consolidated Shareholder Litigation (“XCCSL”) , and actions filed by Darwin Deason, Deason v. Fujifilm Holdings Corp., et al. and Deason v. Xerox Corporation, et al. , against the same defendants as well as, in the first Deason action, former Xerox Chief Executive Officer Ursula M. Burns (the "Fuji Transaction Shareholder Lawsuits"). Plaintiff alleged 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 alleged 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 alleged perpetuated control of Xerox by Mr. Icahn and Mr. Deason and denied the voting franchise of Xerox shareholders. Among other things, plaintiff sought 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. On March 6, 2020, plaintiff in the Miami Firefighters action renewed its motion. On July 23, 2020, after hearing oral argument, the Court issued an order denying the motion and setting certain case deadlines. Discovery commenced. On August 7, 2020, Xerox, the director defendants, and the Icahn defendants filed separate motions to dismiss. On October 1, 2020, plaintiff filed a cross-motion seeking, among other relief, joinder of Xerox Holdings Corporation as a nominal defendant. Briefing on the motions to dismiss and plaintiff’s cross-motion was completed on October 16, 2020. On December 14, 2020, following oral argument, the Court issued a decision and order denying plaintiff’s cross-motion and granting defendants’ motions, dismissing the action in its entirety as to all defendants. Dismissal as to the Icahn defendants was conditioned on the filing of an affidavit, which the Icahn defendants filed on December 16, 2020, indicating whether defendant Icahn gained a profit or incurred a loss on purchases of HP stock during the relevant time period. On January 13, 2021, plaintiff filed a notice of appeal of the December 14, 2020 dismissal order to the Appellate Division, First Department. On April 7, 2021, plaintiff filed in the previously dismissed Ribbe I and XCCSL actions a motion seeking an award of attorneys’ fees of $1.5 and a service award of $10 thousand for benefits he allegedly obtained for Xerox and its stockholders. 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. 2. 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. On March 6, 2020, plaintiff in the Miami Firefighters action renewed its motion. On July 23, 2020, after hearing oral argument, the Court issued an order denying the motion and setting certain case deadlines. Discovery has commenced. On August 10, 2020, the Xerox defendants and the Icahn defendants filed separate motions to dismiss. Briefing on the motions was completed on October 21, 2020. On December 14, 2020, following oral argument, the Court issued a decision and order granting defendants’ motions and dismissing the action in its entirety as to all defendants. Dismissal as to the Icahn defendants was conditioned on the filing of an affidavit, which the Icahn defendants filed on December 16, 2020, indicating whether defendant Icahn gained a profit or incurred a loss on purchases of HP stock during the relevant time period. On December 23, 2020, plaintiff filed a motion seeking discovery related to the Icahn defendants’ losses resulting from their investment in HP. The motion was fully briefed on January 7, 2021. On January 15, 2021, the Court issued a decision and order denying the motion. Also on January 15, 2021, plaintiff filed a notice of appeal of the December 14, 2020 dismissal order to the Appellate Division, First Department. On January 20, 2021, plaintiff filed a notice of appeal of the January 15, 2021 order denying its motion for discovery to the Appellate Division, First Department. 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. Other Litigation 1. Xerox Holdings Corporation v. Factory Mutual Insurance Company and Related Actions: On March 10, 2021, Xerox Holdings Corporation (“XHC”) filed a complaint for breach of contract and declaratory judgment against Factory Mutual Insurance Company in Rhode Island Superior Court, Providence County seeking insurance coverage for business interruption losses resulting from the coronavirus/COVID-19 pandemic. The complaint alleges that defendant agreed to provide XHC with up to $1 billion in per-occurrence coverage for losses resulting from pandemic-related loss or damage to certain real and other property, including business interruption loss resulting from insured property damage; that the pandemic had inflicted significant physical loss or damage to property of XHC and its direct and indirect customers; that XHC’s worldwide actual and projected losses through the end of 2020 totaled in excess of $300 (and is still increasing); and that following XHC’s timely and proper claim in March 2020 for coverage under the “all risk” commercial property insurance policy it had purchased from defendant, defendant improperly denied and rejected coverage for most of the claim. The complaint seeks a jury trial, a declaratory judgment against defendant declaring that Xerox is entitled to full coverage of costs and losses under defendant’s policy and declaring that defendant is required to pay for such costs and losses, subject to any applicable limits; damages in an amount to be determined at trial; consequential damages; attorneys’ fees and costs; pre- and post-judgment interest; and other relief the Court deems just and proper. Also on March 10, 2021, subsidiaries of XHC filed similar complaints and related requests for arbitration in Toronto, London, and Amsterdam (see below). XHC consented to defendant’s request for an extension until May 6, 2021 of its time in which to answer or otherwise respond to the complaint. The parties consented to assignment to the Court’s business calendar. At an initial conference on April 8, 2021, both parties informed the Court that they anticipate filing motions for judgment on the pleadings. a. Canadian action On March 10, 2021, plaintiffs Xerox Canada Inc. and Xerox Canada Ltd. filed a Notice of Action against Factory Mutual Insurance Company in the Ontario Superior Court of Justice in Toronto. On April 9, 2021, plaintiffs filed their Statement of Claim. Plaintiffs must serve both filings by September 10, 2021. b. UK action On March 10, 2021, plaintiffs Concept Group Limited, Continua Limited, Xerox Limited, and Xerox UK Limited filed a Claim Form against F.M. Insurance Company Limited in the High Court of Justice, Commercial Court, in London. Also on March 10, 2021, plaintiffs submitted two Requests for Arbitration, which were withdrawn after the parties agreed on March 31, 2021 that both liability and quantum of plaintiffs’ claims would be litigated in the Commercial Court proceeding. c. Netherlands action On March 10, 2021, plaintiffs Xerox Corporation and 20 of its European subsidiaries filed a Writ of Summons against FM Insurance Europe S.A. in the Amsterdam District Court. Also on March 10, 2021, plaintiffs submitted a Request for Arbitration, which was withdrawn after the parties agreed on April 12, 2021, that both liability and quantum of plaintiffs’ claims would be litigated in the District Court proceeding. Guarantees We have issued or provided approximately $277 of guarantees as of March 31, 2021 in the form of letters of credit or surety bonds issued to i) support certain insurance programs; ii) support our obligations related to the Brazil contingencies; and iii) support certain contracts, primarily with public sector customers, which require us to provide a surety bond as a guarantee of our performance of contractual obligations. In general, we would only be liable for the amount of these guarantees in the event we defaulted in performing our obligations under each contract; the probability of which we believe is remote. We believe that our capacity in the surety markets as well as under various credit arrangements (including our Credit Facility) is sufficient to allow us to respond to future requests for proposals that require such credit support. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events Fuji Xerox Technology Agreement (TA) As previously disclosed, our TA with Fuji Xerox (now known as FUJIFILM Business Innovation Corp.((Fuji Xerox)) expired on March 31, 2021. The TA included a provision that allowed 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. Fuji Xerox elected to continue its use of the Xerox brand trademark over the next two years and, therefore, made the upfront payment due under the amended agreement of $100 in April 2021. We expect to recognize the revenue associated with this extended brand license ratably over the two year transition period. Accordingly, we expect any potential entry by Xerox for Xerographic products into the Fuji Xerox territory under the Xerox brand to be deferred to at least 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 under existing or new purchase/supply agreements. Acquisition In April 2021, Xerox acquired an office equipment dealer in Canada for approximately $30. This acquisition is part of Xerox's strategy of focusing on further penetrating the small-to-medium sized business (SMB) market through acquisitions of local area resellers and partners (including multi-brand dealers). We are currently assessing the purchase price allocation but expect the majority to be allocated to intangible assets and goodwill. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Accounting Standards Updates | Accounting Standard Updates to be Adopted: Debt In August 2020, the FASB issued ASU 2020-06 , Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40). This update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. This update is effective for our fiscal year beginning January 1, 2022. We are currently evaluating the impact of the adoption of this standard on the Company’s consolidated financial statements and related disclosures. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04 , Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01 , Reference Rate Reform (Topic 848): Scope , which provided clarification guidance to ASU 2020-04. These ASUs were effective commencing with our quarter ended March 31, 2020 through December 31, 2022. There has been no impact to date as a result of ASU 2020-04 or ASU 2021-01 and subsequent amendments on reference rate reform, however we continue to evaluate potential future impacts that may result from the discontinuation of LIBOR or other reference rates as well as the accounting provided in this update on our financial condition, results of operations, and cash flows. Accounting Standard Updates Adopted in 2021: Income Taxes In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which was 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. We adopted this update effective for our fiscal year beginning January 1, 2021. The adoption did not have nor is expected to have a material impact on our results of operations, financial position or disclosures. Other Updates In 2021 and 2020, the FASB also issued the following ASUs, which impact the Company but did not have or 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. |
Operating Leases | Operating LeasesWe 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 twelve years and a variety of renewal and/or termination options. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows: Three Months Ended 2021 2020 Primary geographical markets (1) : United States $ 974 $ 1,114 Europe 499 481 Canada 93 108 Other 144 157 Total Revenues $ 1,710 $ 1,860 Major product and services lines: Equipment $ 381 $ 325 Supplies, paper and other sales 221 240 Maintenance agreements (2) 435 529 Service arrangements (3) 489 566 Rental and other 129 141 Financing 55 59 Total Revenues $ 1,710 $ 1,860 Sales channels: Direct equipment lease (4) $ 147 $ 126 Distributors & resellers (5) 254 223 Customer direct 201 216 Total Sales $ 602 $ 565 _____________ (1) Geographic area data is based upon the location of the subsidiary reporting the revenue. (2) 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). (3) Primarily includes revenues from our Managed Services offerings. Also includes revenues from embedded operating leases, which were not significant. (4) Primarily reflects sales through bundled lease arrangements. (5) Primarily reflects sales through our two-tier distribution channels. |
Capitalized contract cost | Incremental direct costs are as follows: Three Months Ended 2021 2020 Incremental direct costs of obtaining a contract $ 13 $ 15 Amortization of incremental direct costs 19 21 |
Lessor (Tables)
Lessor (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Components of lease income | The components of lease income are as follows: Three Months Ended Location in Statements of Income (Loss) 2021 2020 Revenue from sales type leases Sales $ 147 $ 126 Interest income on lease receivables Financing 55 59 Lease income - operating leases Services, maintenance and rentals 67 86 Variable lease income Services, maintenance and rentals 15 22 Total Lease income $ 284 $ 293 |
Components of lease income | The components of lease income are as follows: Three Months Ended Location in Statements of Income (Loss) 2021 2020 Revenue from sales type leases Sales $ 147 $ 126 Interest income on lease receivables Financing 55 59 Lease income - operating leases Services, maintenance and rentals 67 86 Variable lease income Services, maintenance and rentals 15 22 Total Lease income $ 284 $ 293 |
Components of lease income | The components of lease income are as follows: Three Months Ended Location in Statements of Income (Loss) 2021 2020 Revenue from sales type leases Sales $ 147 $ 126 Interest income on lease receivables Financing 55 59 Lease income - operating leases Services, maintenance and rentals 67 86 Variable lease income Services, maintenance and rentals 15 22 Total Lease income $ 284 $ 293 |
Supplementary Financial Infor_2
Supplementary Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Financial Information [Abstract] | |
Schedule of restricted cash | Cash, cash equivalents and restricted cash amounts were as follows: March 31, December 31, Cash and cash equivalents $ 2,379 $ 2,625 Restricted cash Litigation deposits in Brazil 38 42 Escrow and cash collections related to secured borrowing arrangements (1) 43 22 Other restricted cash 1 2 Total Restricted cash 82 66 Cash, cash equivalents and restricted cash $ 2,461 $ 2,691 _____________ (1) Represents collections on finance receivables pledged for secured borrowings that will be remitted to lenders in the following month. |
Restricted cash balance sheet location | Restricted cash was reported in the Condensed Consolidated Balance Sheets as follows: March 31, December 31, Other current assets $ 44 $ 23 Other long-term assets 38 43 Total Restricted cash $ 82 $ 66 |
Summarized cash flow information | Summarized cash flow information is as follows: Three Months Ended 2021 2020 Provision for receivables $ 11 $ 74 Provision for inventory 9 6 Provision for product warranty 2 2 Depreciation of buildings and equipment 19 21 Depreciation and obsolescence of equipment on operating leases 42 51 Amortization of internal use software 10 11 Amortization of acquired intangible assets (1) 15 11 Amortization of customer contract costs (2) 20 22 Cost of additions to land, buildings and equipment 8 18 Cost of additions to internal use software 9 5 Common stock dividends - Xerox Holdings Corporation 50 54 Preferred stock dividends - Xerox Holdings Corporation 4 4 Repurchases related to stock-based compensation - Xerox Holdings Corporation 4 7 _____________ (1) Amortization of acquired intangible assets of Xerox is $14 for the three months ended March 31, 2021. (2) Amortization of customer contract costs is reported in Decrease (increase) in other current and long-term assets in the Condensed Consolidated Statements of Cash Flows. Refer to Note 3 - Revenue - Contract Costs for additional information. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of accounts receivable, net | Accounts receivable, net were as follows: March 31, December 31, Invoiced $ 637 $ 735 Accrued (1) 212 217 Allowance for doubtful accounts (68) (69) Accounts receivable, net $ 781 $ 883 _____________ (1) Accrued receivables include amounts to be invoiced in the subsequent quarter for current services provided. |
Schedule of allowance for doubtful accounts | The allowance for doubtful accounts was as follows: 2021 2020 Balance at December 31 st $ 69 $ 55 Provision 4 8 Charge-offs (5) (2) Recoveries and other (1) — (1) Balance at March 31 st $ 68 $ 60 _____________ (1) 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. |
Schedule of accounts receivables sales | Accounts receivable sales activity was as follows: Three Months Ended 2021 2020 Accounts receivable sales (1) $ 107 $ 53 ____________ (1) Losses on sales were not material. 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. |
Finance Receivables, Net (Table
Finance Receivables, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Finance receivables | Finance receivables, net were as follows: March 31, December 31, Gross receivables $ 3,596 $ 3,691 Unearned income (384) (393) Subtotal 3,212 3,298 Residual values — — Allowance for doubtful accounts (135) (133) Finance receivables, net 3,077 3,165 Less: Billed portion of finance receivables, net 92 99 Less: Current portion of finance receivables not billed, net 1,065 1,082 Finance receivables due after one year, net $ 1,920 $ 1,984 |
Allowance for credit losses, financing receivables | The allowance for doubtful accounts as well as the related investment in finance receivables were as follows: United States Canada EMEA (1) Total Balance at December 31, 2020 $ 77 $ 15 $ 41 $ 133 Provision 2 1 3 6 Charge-offs (2) — (1) (3) Recoveries and other (2) 1 — (2) (1) Balance at March 31, 2021 $ 78 $ 16 $ 41 $ 135 Finance receivables as of March 31, 2021 collectively evaluated for impairment (3) $ 1,806 $ 288 $ 1,118 $ 3,212 Balance at December 31, 2019 $ 59 $ 10 $ 20 $ 89 Provision 35 6 25 66 Charge-offs (3) (1) (4) (8) Recoveries and other (2) — — (1) (1) Balance at March 31, 2020 $ 91 $ 15 $ 40 $ 146 Finance receivables as of March 31, 2020 collectively evaluated for impairment (3) $ 1,866 $ 289 $ 1,132 $ 3,287 _____________ (1) Includes developing market countries. (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. |
Credit quality indicators for financing receivables | Details about our finance receivables portfolio based on geography, origination year and credit quality indicators are as follows: March 31, 2021 2021 2020 2019 2018 2017 Prior Total United States (Direct): Low Credit Risk $ 46 $ 154 $ 134 $ 111 $ 56 $ 21 $ 522 Average Credit Risk 17 53 89 43 20 6 228 High Credit Risk 18 87 39 24 12 5 185 Total $ 81 $ 294 $ 262 $ 178 $ 88 $ 32 $ 935 United States (Indirect): Low Credit Risk $ 57 $ 194 $ 140 $ 69 $ 26 $ 4 $ 490 Average Credit Risk 42 110 99 56 24 5 336 High Credit Risk 9 16 8 8 3 1 45 Total $ 108 $ 320 $ 247 $ 133 $ 53 $ 10 $ 871 Canada Low Credit Risk $ 11 $ 36 $ 31 $ 21 $ 7 $ 3 $ 109 Average Credit Risk 10 44 36 23 15 4 132 High Credit Risk 3 16 10 9 7 2 47 Total $ 24 $ 96 $ 77 $ 53 $ 29 $ 9 $ 288 EMEA (1) Low Credit Risk $ 65 $ 176 $ 156 $ 109 $ 46 $ 14 $ 566 Average Credit Risk 52 153 138 89 38 12 482 High Credit Risk 7 19 21 12 8 3 70 Total $ 124 $ 348 $ 315 $ 210 $ 92 $ 29 $ 1,118 Total Finance Receivables Low Credit Risk $ 179 $ 560 $ 461 $ 310 $ 135 $ 42 $ 1,687 Average Credit Risk 121 360 362 211 97 27 1,178 High Credit Risk 37 138 78 53 30 11 347 Total $ 337 $ 1,058 $ 901 $ 574 $ 262 $ 80 $ 3,212 December 31, 2020 2020 2019 2018 2017 2016 Prior Total United States (Direct): Low Credit Risk $ 164 $ 151 $ 128 $ 71 $ 32 $ 4 $ 550 Average Credit Risk 54 95 52 26 8 2 237 High Credit Risk 90 42 27 13 5 3 180 Total $ 308 $ 288 $ 207 $ 110 $ 45 $ 9 $ 967 United States (Indirect): Low Credit Risk $ 193 $ 140 $ 79 $ 33 $ 7 $ — $ 452 Average Credit Risk 129 124 71 31 8 — 363 High Credit Risk 19 9 9 3 1 — 41 Total $ 341 $ 273 $ 159 $ 67 $ 16 $ — $ 856 Canada Low Credit Risk $ 37 $ 34 $ 24 $ 10 $ 5 $ 1 $ 111 Average Credit Risk 46 39 26 17 6 1 135 High Credit Risk 18 10 10 10 3 — 51 Total $ 101 $ 83 $ 60 $ 37 $ 14 $ 2 $ 297 EMEA (1) Low Credit Risk $ 197 $ 177 $ 131 $ 62 $ 20 $ 4 $ 591 Average Credit Risk 170 160 108 51 17 4 510 High Credit Risk 23 24 15 10 4 1 77 Total $ 390 $ 361 $ 254 $ 123 $ 41 $ 9 $ 1,178 Total Finance Receivables Low Credit Risk $ 591 $ 502 $ 362 $ 176 $ 64 $ 9 $ 1,704 Average Credit Risk 399 418 257 125 39 7 1,245 High Credit Risk 150 85 61 36 13 4 349 Total $ 1,140 $ 1,005 $ 680 $ 337 $ 116 $ 20 $ 3,298 _____________ (1) Includes developing market countries. |
Aging of billed finance receivables | The aging of our billed finance receivables is as follows: March 31, 2021 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Direct $ 30 $ 7 $ 8 $ 45 $ 890 $ 935 $ 70 Indirect 18 4 3 25 846 871 — Total United States 48 11 11 70 1,736 1,806 70 Canada 6 2 1 9 279 288 13 EMEA (1) 12 3 2 17 1,101 1,118 17 Total $ 66 $ 16 $ 14 $ 96 $ 3,116 $ 3,212 $ 100 December 31, 2020 Current 31-90 Days Past Due >90 Days Past Due Total Billed Unbilled Total Finance Receivables >90 Days and Accruing Direct $ 33 $ 6 $ 9 $ 48 $ 919 $ 967 $ 74 Indirect 21 4 3 28 828 856 — Total United States 54 10 12 76 1,747 1,823 74 Canada 8 2 — 10 287 297 12 EMEA (1) 12 3 2 17 1,161 1,178 23 Total $ 74 $ 15 $ 14 $ 103 $ 3,195 $ 3,298 $ 109 _____________ (1) Includes developing market countries |
Inventories and Equipment on _2
Inventories and Equipment on Operating Leases, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventories and Equipment on Operating Leases, Net [Abstract] | |
Schedule of inventories by major category | The following is a summary of Inventories by major category: March 31, December 31, Finished goods $ 697 $ 707 Work-in-process 48 43 Raw materials 96 93 Total Inventories $ 841 $ 843 |
Schedule of equipment on operating leases and related accumulated depreciation | Equipment on operating leases and the related accumulated depreciation were as follows: March 31, December 31, Equipment on operating leases $ 1,332 $ 1,376 Accumulated depreciation (1,055) (1,080) Equipment on operating leases, net $ 277 $ 296 |
Lessee (Tables)
Lessee (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of components of lease expense | The components of lease expense are as follows: Three Months Ended 2021 2020 Operating lease expense $ 27 $ 28 Short-term lease expense 5 5 Variable lease expense (1) 12 12 Sublease income (1) — Total Lease expense $ 43 $ 45 _____________ |
Schedule of operating leases assets and liabilities | Operating lease ROU assets, net and operating lease liabilities were reported in the Condensed Consolidated Balance Sheets as follows: March 31, December 31, Other long-term assets $ 287 $ 310 Accrued expenses and other current liabilities $ 79 $ 83 Other long-term liabilities 231 250 Total Operating lease liabilities $ 310 $ 333 |
Restructuring Programs (Tables)
Restructuring Programs (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Program Activity | Information related to restructuring program activity is outlined below: Severance and Related Costs Other Contractual Termination Costs (2) Asset Impairments (3) Total Balance at December 31, 2020 $ 78 $ 4 $ — $ 82 Provision 14 1 10 25 Reversals (4) — — (4) Net current period charges (1) 10 1 10 21 Charges against reserve and currency (29) (1) (10) (40) Balance at March 31, 2021 $ 59 $ 4 $ — $ 63 _____________ _ (1) Represents net amount recognized within the Condensed Consolidated Statements of Income (Loss) for the period 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) Primarily relates to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $1 for leased ROU assets and $9 for owned assets upon exit from the facilities, net of any potential sublease income and other recoveries, including potential sales, in the first quarter of 2021. |
Reconciliation to the consolidated statements of cash flows | The following table summarizes the reconciliation to the Condensed Consolidated Statements of Cash Flows: Three Months Ended 2021 2020 Charges against reserve and currency $ (40) $ (35) Effects of foreign currency and other non-cash items 13 — Restructuring cash payments $ (27) $ (35) |
Restructuring and related costs | In connection with our restructuring programs, we also incurred certain related costs as follows: Three Months Ended 2021 2020 Retention related severance/bonuses (1) $ (4) $ 7 Contractual severance costs — 4 Consulting and other costs (2) — 1 Total $ (4) $ 12 ____________ _ (1) Includes retention related severance and bonuses for employees expected to continue working beyond their minimum notification period before termination. The credit of $4 in the first quarter 2021 reflects a change in estimate. (2) Represents professional support services associated with our business transformation initiatives. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of assets and liabilities held by SPE | Below are the assets and liabilities held by the consolidated SPEs, which are included in our Condensed Consolidated Balance Sheets. As a result of the above sales, the assets of the SPEs are not available to satisfy any of our other obligations. Conversely, the credit holders of these SPEs borrowings do not have legal recourse to the Company’s general credit or other assets. March 31, December 31, Assets held by SPEs Billed portion of finance receivables, net $ 25 $ 28 Finance receivables, net 326 350 Finance receivables due after one year, net 440 510 Equipment on operating leases, net 6 8 Restricted cash (1) 43 22 Total Assets $ 840 $ 918 Liabilities held by SPEs Current portion of long-term debt, net (2) $ 380 $ 394 Long term debt, net (2) 290 370 Total Liabilities $ 670 $ 764 ____________ _ (1) Restricted cash is included in Other current assets in our Condensed Consolidated Balance Sheet. (2) Net of debt issuance costs of $3. |
Interest income and interest expense disclosure | Interest expense and income were as follows: Three Months Ended 2021 2020 Interest expense (1)(2) $ 52 $ 51 Interest income (3) 56 67 ____________ _ (1) Includes Cost of financing as well as non-financing interest expense that is included in Other expenses, net in the Condensed Consolidated Statements of Income (Loss). (2) Interest expense for the three month ended March 31, 2021 for Xerox Corporation includes $20 of intercompany interest expense for the Xerox Holdings Corporation / Xerox Corporation Intercompany Loan. (3) Includes Financing revenue as well as other interest income that is included in Other expenses, net in the Condensed Consolidated Statements of Income (Loss). |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments fair value | The following table provides a summary of the fair value amounts of our derivative instruments: Designation of Derivatives Balance Sheet Location March 31, December 31, Derivatives Designated as Hedging Instruments Foreign exchange contracts - forwards Other current assets $ 1 $ 3 Accrued expenses and other current liabilities (8) (2) Foreign currency options Other current assets — 1 Net designated derivative (liability) asset $ (7) $ 2 Derivatives NOT Designated as Hedging Instruments Foreign exchange contracts – forwards Other current assets $ 3 $ 3 Accrued expenses and other current liabilities (6) (3) Net undesignated derivative liability $ (3) $ — Summary of Derivatives Total Derivative assets $ 4 $ 7 Total Derivative liabilities (14) (5) Net Derivative (liability) asset $ (10) $ 2 |
Summary of gains (losses) on derivative instruments | The following table provides a summary of gains (losses) on derivative instruments: Three Months Ended Gain (Loss) on Derivative Instruments 2021 2020 Fair Value Hedges - Interest Rate Contracts Derivative loss recognized in interest expense $ — $ (1) Hedged item gain recognized in interest expense — 1 Cash Flow Hedges - Foreign Exchange Forward Contracts and Options Derivative (loss) gain recognized in OCI (effective portion) $ (10) $ 7 Derivative loss reclassified from AOCL to income - Cost of sales (effective portion) (1) (1) |
Schedule of derivatives not designated as hedging instruments gains (losses) | The following table provides a summary of gains and (losses) on non-designated derivative instruments: Derivatives NOT Designated as Hedging Instruments Location of Derivative (Loss) Gain Three Months Ended 2021 2020 Foreign exchange contracts – forwards Other expense – Currency (losses) gains, net $ (18) $ 14 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial assets and liabilities | The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs. March 31, December 31, Assets Foreign exchange contracts - forwards $ 4 $ 6 Foreign currency options — 1 Deferred compensation plan investments in mutual funds 17 18 Total $ 21 $ 25 Liabilities Foreign exchange contracts - forwards $ 14 $ 5 Deferred compensation plan liabilities 17 17 Total $ 31 $ 22 |
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: March 31, 2021 December 31, 2020 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 2,379 $ 2,379 $ 2,625 $ 2,625 Accounts receivable, net 781 781 883 883 Short-term debt and current portion of long-term debt 678 688 394 396 Long-term Debt Xerox Holdings Corporation 1,494 1,558 1,493 1,596 Xerox Corporation 1,890 1,992 2,187 2,298 Xerox - Other Subsidiaries (1) 290 292 370 372 Long-term debt $ 3,674 $ 3,842 $ 4,050 $ 4,266 ____________ _ (1) Represents subsidiaries of Xerox Corporation |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
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: Three Months Ended March 31, Pension Benefits U.S. Plans Non-U.S. Plans Retiree Health Components of Net Periodic Benefit Costs: 2021 2020 2021 2020 2021 2020 Service cost $ — $ 1 $ 5 $ 5 $ 1 $ 1 Interest cost 18 23 22 29 2 2 Expected return on plan assets (28) (26) (52) (47) — — Recognized net actuarial loss 5 7 15 14 — — Amortization of prior service credit — — — — (17) (19) Recognized settlement loss 15 19 — — — — Recognized curtailment gain — — — (1) — — Defined benefit plans 10 24 (10) — (14) (16) Defined contribution plans — 5 5 5 n/a n/a Net Periodic Benefit Cost (Credit) 10 29 (5) 5 (14) (16) Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss): Net actuarial (gain) loss (1) (44) 12 1 — — — Amortization of net actuarial loss (20) (26) (15) (14) — — Amortization of prior service credit — — — — 17 19 Total Recognized in Other Comprehensive Income (Loss) (2) (64) (14) (14) (14) 17 19 Total Recognized in Net Periodic Benefit (Credit) Cost and Other Comprehensive Income (Loss) $ (54) $ 15 $ (19) $ (9) $ 3 $ 3 _____________ (1) The net actuarial (gain) loss for U.S. Plans primarily reflects the remeasurement of our primary U.S. pension plans as a result of the payment of periodic settlements. (2) Amounts represent the pre-tax effect included within Other Comprehensive Income (Loss). Refer to Note 17 - Other Comprehensive Income (Loss) for related tax effects and the after-tax amounts. |
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. Three Months Ended Year Ended December 31, 2021 2020 Estimated 2021 2020 U.S. plans $ 6 $ 6 $ 25 $ 35 Non-U.S. plans 29 27 105 104 Total Pension $ 35 $ 33 $ 130 $ 139 Retiree Health $ 6 $ 5 $ 30 $ 25 |
Shareholders' Equity of Xerox_2
Shareholders' Equity of Xerox Holdings (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stockholders equity | The shareholders' equity information presented below reflects the consolidated activity of Xerox Holdings. Common Stock (1) Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (2) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2020 $ 198 $ 2,445 $ — $ 6,281 $ (3,332) $ 5,592 $ 4 $ 5,596 Comprehensive income (loss), net — — — 39 (3) 36 — 36 Cash dividends declared - common (3) — — — (49) — (49) — (49) Cash dividends declared - preferred (4) — — — (4) — (4) — (4) Stock option and incentive plans, net 1 11 — — — 12 — 12 Payments to acquire treasury stock, including fees — — (162) — — (162) — (162) Balance at March 31, 2021 $ 199 $ 2,456 $ (162) $ 6,267 $ (3,335) $ 5,425 $ 4 $ 5,429 Common Stock (1) Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (2) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2019 $ 215 $ 2,782 $ (76) $ 6,312 $ (3,646) $ 5,587 $ 7 $ 5,594 Comprehensive loss, net — — — (2) (138) (140) — (140) Cash dividends declared - common (3) — — — (54) — (54) — (54) Cash dividends declared - preferred (4) — — — (4) — (4) — (4) Stock option and incentive plans, net — 4 — — — 4 — 4 Cancellation of treasury stock (2) (74) 76 — — — — — Balance at March 31, 2020 $ 213 $ 2,712 $ — $ 6,252 $ (3,784) $ 5,393 $ 7 $ 5,400 _____________ (1) Common Stock has a par value of $1 per share. (2) Refer to Note 17 - Other Comprehensive Income (Loss) for the components of AOCL. (3) Cash dividends declared on common stock for the three months ended March 31, 2021 and 2020 were $0.25 per share, respectively. (4) Cash dividends declared on preferred stock for the three months ended March 31, 2021 and 2020 were $20.00 per share, respectively. |
Summary of treasury stock purchases | The following is a summary of the purchases of common stock during 2021: Shares Amount Balance at December 31, 2020 — $ — Purchases (1) 6,704 162 Cancellations — — Balance at March 31, 2021 6,704 $ 162 _____________ (1) Includes associated fees. |
Shareholders' Equity of Xerox (
Shareholders' Equity of Xerox (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Schedule of stockholders equity | The shareholders' equity information presented below reflects the consolidated activity of Xerox Holdings. Common Stock (1) Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (2) Xerox Holdings Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2020 $ 198 $ 2,445 $ — $ 6,281 $ (3,332) $ 5,592 $ 4 $ 5,596 Comprehensive income (loss), net — — — 39 (3) 36 — 36 Cash dividends declared - common (3) — — — (49) — (49) — (49) Cash dividends declared - preferred (4) — — — (4) — (4) — (4) Stock option and incentive plans, net 1 11 — — — 12 — 12 Payments to acquire treasury stock, including fees — — (162) — — (162) — (162) Balance at March 31, 2021 $ 199 $ 2,456 $ (162) $ 6,267 $ (3,335) $ 5,425 $ 4 $ 5,429 Common Stock (1) Additional Paid-in Capital Treasury Stock Retained Earnings AOCL (2) Xerox Holdings Shareholders’ Equity Non- controlling Interests Total Equity Balance at December 31, 2019 $ 215 $ 2,782 $ (76) $ 6,312 $ (3,646) $ 5,587 $ 7 $ 5,594 Comprehensive loss, net — — — (2) (138) (140) — (140) Cash dividends declared - common (3) — — — (54) — (54) — (54) Cash dividends declared - preferred (4) — — — (4) — (4) — (4) Stock option and incentive plans, net — 4 — — — 4 — 4 Cancellation of treasury stock (2) (74) 76 — — — — — Balance at March 31, 2020 $ 213 $ 2,712 $ — $ 6,252 $ (3,784) $ 5,393 $ 7 $ 5,400 _____________ (1) Common Stock has a par value of $1 per share. (2) Refer to Note 17 - Other Comprehensive Income (Loss) for the components of AOCL. (3) Cash dividends declared on common stock for the three months ended March 31, 2021 and 2020 were $0.25 per share, respectively. (4) Cash dividends declared on preferred stock for the three months ended March 31, 2021 and 2020 were $20.00 per share, respectively. |
XEROX CORPORATION | |
Schedule of stockholders equity | The shareholder's equity information presented below reflects the consolidated activity of Xerox. Additional Paid-in Capital Retained Earnings AOCL (1) Xerox Non-controlling Interests Total Equity Balance at December 31, 2020 $ 4,879 $ 5,834 $ (3,332) $ 7,381 $ 4 $ 7,385 Comprehensive income (loss), net — 41 (3) 38 — 38 Dividends declared to parent — (201) — (201) — (201) Intercompany loan capitalization (2) (1,494) — — (1,494) — (1,494) Transfers to parent (34) — — (34) — (34) Balance at March 31, 2021 $ 3,351 $ 5,674 $ (3,335) $ 5,690 $ 4 $ 5,694 Additional Paid-in Capital Retained Earnings AOCL (1) Xerox Non-controlling Interests Total Equity Balance at December 31, 2019 $ 3,266 $ 6,247 $ (3,646) $ 5,867 $ 7 $ 5,874 Comprehensive loss, net — (2) (138) (140) — (140) Dividends declared to parent — (290) — (290) — (290) Transfers from parent 238 — — 238 — 238 Balance at March 31, 2020 $ 3,504 $ 5,955 $ (3,784) $ 5,675 $ 7 $ 5,682 _____________ (1) Refer to Note 17 - Other Comprehensive Income (Loss) for the components of AOCL. |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of other comprehensive (loss) income | Other Comprehensive Income (Loss) is comprised of the following: Three Months Ended 2021 2020 Pre-tax Net of Tax Pre-tax Net of Tax Translation Adjustments Losses $ (52) $ (51) $ (204) $ (197) Unrealized (Losses) Gains Changes in fair value of cash flow hedges (losses) gains (10) (8) 7 4 Changes in cash flow hedges reclassed to earnings (1) 1 1 1 1 Net Unrealized (Losses) Gains (9) (7) 8 5 Defined Benefit Plans Gains (Losses) Net actuarial/prior service gains (losses) 43 32 (12) (9) Prior service amortization (2) (17) (12) (19) (14) Actuarial loss amortization/settlement (2) 35 26 40 30 Other gains (3) 9 9 47 47 Changes in Defined Benefit Plans Gains 70 55 56 54 Other Comprehensive Income (Loss) Attributable to Xerox Holdings/Xerox $ 9 $ (3) $ (140) $ (138) ____________ (1) Reclassified to Cost of sales - refer to Note 12 - Financial Instruments for additional information regarding our cash flow hedges. (2) Reclassified to Total Net Periodic Benefit Cost - refer to Note 14 - Employee Benefit Plans for additional information. |
Schedule of accumulated other comprehensive loss | AOCL is comprised of the following: March 31, December 31, Cumulative translation adjustments $ (1,771) $ (1,720) Other unrealized (losses) gains, net (5) 2 Benefit plans net actuarial losses and prior service credits (1,559) (1,614) Total Accumulated Other Comprehensive Loss Attributable to Xerox Holdings/Xerox $ (3,335) $ (3,332) |
Earnings_(Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings (loss) per share of Xerox Holdings Corporation's common stock: Three Months Ended 2021 2020 Basic Earnings (Loss) per Share Net Income (Loss) Attributable to Xerox Holdings $ 39 $ (2) Accrued dividends on preferred stock (4) (4) Adjusted Net income (loss) available to common shareholders $ 35 $ (6) Weighted average common shares outstanding 195,985 212,750 Basic Earnings (Loss) per Share $ 0.18 $ (0.03) Diluted Earnings (Loss) per Share Net Income (Loss) Attributable to Xerox Holdings $ 39 $ (2) Accrued dividends on preferred stock (4) (4) Adjusted Net income (loss) available to common shareholders $ 35 $ (6) Weighted average common shares outstanding 195,985 212,750 Common shares issuable with respect to: Stock options — — Restricted stock and performance shares 2,181 — Convertible preferred stock — — Adjusted weighted average common shares outstanding 198,166 212,750 Diluted Earnings (Loss) per Share $ 0.18 $ (0.03) 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: Stock options 693 849 Restricted stock and performance shares 5,327 6,478 Convertible preferred stock 6,742 6,742 Total Anti-Dilutive Securities 12,762 14,069 Dividends per Common Share $ 0.25 $ 0.25 |
Contingencies and Litigation (T
Contingencies and Litigation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of loss contingencies by contingency | Below is a summary of our Brazilian tax contingencies: March 31, December 31, Tax contingency - unreserved $ 335 $ 355 Escrow cash deposits 35 39 Surety bonds 96 112 Letters of credit 72 78 Liens on Brazilian assets — — |
Basis of Presentation (Details)
Basis of Presentation (Details) | 3 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Goodwill [Line Items] | |
Percentage of fair value over carrying value, goodwill | 15.00% |
Maximum | |
Goodwill [Line Items] | |
Percentage of fair value over carrying value, goodwill | 20.00% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 1,710 | $ 1,860 |
Equipment | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 381 | 325 |
Supplies, paper and other sales | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 221 | 240 |
Maintenance agreements | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 435 | 529 |
Service arrangements | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 489 | 566 |
Rental and other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 129 | 141 |
Financing | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 55 | 59 |
Sales | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 602 | 565 |
Sales | Direct equipment lease | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 147 | 126 |
Sales | Distributors & resellers | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 254 | 223 |
Sales | Customer direct | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 201 | 216 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 974 | 1,114 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 499 | 481 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 93 | 108 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 144 | $ 157 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Revenue, Contract Assets, Liabilities and Costs[Line Items] | |||
Contract liabilities | $ 126 | $ 130 | |
Contract liability amortization period (months) | 30 months | ||
Deferred incremental direct costs, amortization period (years) | 4 years | ||
Deferred incremental direct costs net of accumulated amortization | $ 140 | 145 | |
Contract Fulfillment Costs and Inducements | |||
Revenue, Contract Assets, Liabilities and Costs[Line Items] | |||
Capitalized contract costs, amounts deferred | 17 | $ 13 | |
Capitalized contract costs, amortization | $ 1 | $ 1 |
Revenue - Incremental Direct Co
Revenue - Incremental Direct Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Incremental direct costs of obtaining a contract | $ 13 | $ 15 |
Amortization of incremental direct costs | $ 19 | $ 21 |
Lessor (Details)
Lessor (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Revenue from sales type leases | $ 147 | $ 126 |
Interest income on lease receivables | 55 | 59 |
Lease income - operating leases | 67 | 86 |
Variable lease income | 15 | 22 |
Total Lease income | 284 | 293 |
Profit at lease commencement, sales type leases | $ 56 | $ 43 |
Supplementary Financial Infor_3
Supplementary Financial Information - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Supplemental Financial Information [Abstract] | ||
Cash and cash equivalents | $ 2,379 | $ 2,625 |
Restricted cash | ||
Litigation deposits in Brazil | 38 | 42 |
Escrow and cash collections related to secured borrowing arrangements | 43 | 22 |
Other restricted cash | 1 | 2 |
Total Restricted cash | 82 | 66 |
Cash, cash equivalents and restricted cash | $ 2,461 | $ 2,691 |
Supplementary Financial Infor_4
Supplementary Financial Information - Restricted Cash Balance Sheet Location (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total Restricted cash | $ 82 | $ 66 |
Other current assets | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total Restricted cash | 44 | 23 |
Other long-term assets | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total Restricted cash | $ 38 | $ 43 |
Supplementary Financial Infor_5
Supplementary Financial Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Supplemental Financial Information [Abstract] | ||
Provision for receivables | $ 11 | $ 74 |
Provision for inventory | 9 | 6 |
Provision for product warranty | 2 | 2 |
Depreciation of buildings and equipment | 19 | 21 |
Depreciation and obsolescence of equipment on operating leases | 42 | 51 |
Amortization of internal use software | 10 | 11 |
Amortization of acquired intangible assets | 15 | 11 |
Amortization of customer contract costs | 20 | 22 |
Cost of additions to land, buildings and equipment | 8 | 18 |
Cost of additions to internal use software | 9 | 5 |
Common stock dividends - Xerox Holdings Corporation | 50 | 54 |
Preferred stock dividends - Xerox Holdings Corporation | 4 | 4 |
Repurchases related to stock-based compensation - Xerox Holdings Corporation | 4 | 7 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortization of Intangible Assets | 15 | 11 |
XEROX CORPORATION | ||
Supplemental Financial Information [Abstract] | ||
Amortization of acquired intangible assets | 14 | 11 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortization of Intangible Assets | $ 14 | $ 11 |
Accounts Receivable, Net - Summ
Accounts Receivable, Net - Summary (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Allowance for doubtful accounts | $ (68) | $ (60) | $ (69) | $ (68) | $ (69) | $ (55) |
Accounts receivable, net | 781 | 883 | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Balance | 68 | 60 | $ 69 | |||
Provision for receivables | 4 | 8 | ||||
Charge-offs | (5) | (2) | ||||
Recoveries and other | $ 0 | $ (1) | ||||
Credit Concentration Risk | Accounts Receivable | ||||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Concentration risk (percentage) | 8.00% | 7.20% | ||||
Accounts Receivable | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Invoiced | 637 | 735 | ||||
Accrued | 212 | 217 | ||||
Allowance for doubtful accounts | $ (68) | $ (69) | (68) | (69) | ||
Accounts receivable, net | $ 781 | $ 883 | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Balance | $ 68 | $ 69 |
Accounts Receivable, Net - Acco
Accounts Receivable, Net - Accounts Receivable Sales Arrangements (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Accounts Receivable Sales Arrangements [Abstract] | |||
Uncollected accounts receivable sold and derecognized | $ 93 | $ 136 | |
Accounts Receivable | |||
Accounts Receivable Sales Arrangements [Abstract] | |||
Accounts receivable sales | $ 107 | $ 53 |
Finance Receivables, Net - Summ
Finance Receivables, Net - Summary (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Gross receivables | $ 3,596 | $ 3,691 | ||
Unearned income | (384) | (393) | ||
Total | 3,212 | 3,298 | ||
Residual values | 0 | 0 | ||
Allowance for doubtful accounts | (135) | (133) | $ (146) | $ (89) |
Finance receivables, net | 3,077 | 3,165 | ||
Less: Billed portion of finance receivables, net | 92 | 99 | ||
Less: Current portion of finance receivables not billed, net | 1,065 | 1,082 | ||
Finance receivables due after one year, net | $ 1,920 | $ 1,984 | ||
Finance receivables lease portfolio -low - years | 2 years | |||
Finance lease portfolio average maturity - high - years | 3 years | |||
Credit Concentration Risk | Financing Receivable | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Concentration risk (percentage) | 4.20% | 4.00% |
Finance Receivables, Net - Allo
Finance Receivables, Net - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Provision | $ 6 | $ 66 |
Reserves as a percentage of receivables | 4.00% | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 133 | $ 89 |
Provision | 6 | 66 |
Charge-offs | (3) | (8) |
Recoveries and other | (1) | (1) |
Ending Balance | 135 | 146 |
Finance receivables collectively evaluated for impairment | $ 3,212 | 3,287 |
Loss rates of customers with investment grade credit quality | 1.00% | |
Loss rates of customers with non investment grade credit quality, low range | 2.00% | |
Loss rates of customers with non investment grade credit quality, high range | 5.00% | |
Loss rates of customers with substandard doubtful credit quality - low | 7.00% | |
Loss rates of customers with substandard doubtful credit quality - high | 10.00% | |
COVID-19 Pandemic | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Provision | 60 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Provision | 60 | |
United States | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Provision | $ 2 | 35 |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 77 | 59 |
Provision | 2 | 35 |
Charge-offs | (2) | (3) |
Recoveries and other | 1 | 0 |
Ending Balance | 78 | 91 |
Finance receivables collectively evaluated for impairment | 1,806 | 1,866 |
Canada | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Provision | 1 | 6 |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 15 | 10 |
Provision | 1 | 6 |
Charge-offs | 0 | (1) |
Recoveries and other | 0 | 0 |
Ending Balance | 16 | 15 |
Finance receivables collectively evaluated for impairment | 288 | 289 |
Europe | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Provision | 3 | 25 |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | 41 | 20 |
Provision | 3 | 25 |
Charge-offs | (1) | (4) |
Recoveries and other | (2) | (1) |
Ending Balance | 41 | 40 |
Finance receivables collectively evaluated for impairment | $ 1,118 | $ 1,132 |
Finance Receivables, Net - Cred
Finance Receivables, Net - Credit Quality Indicators (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | $ 337 | $ 1,140 |
CY - 1 | 1,058 | 1,005 |
CY - 2 | 901 | 680 |
CY - 3 | 574 | 337 |
CY - 4 | 262 | 116 |
Prior | 80 | 20 |
Total | 3,212 | 3,298 |
United States (Direct): | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 81 | 308 |
CY - 1 | 294 | 288 |
CY - 2 | 262 | 207 |
CY - 3 | 178 | 110 |
CY - 4 | 88 | 45 |
Prior | 32 | 9 |
Total | 935 | 967 |
United States (Indirect): | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 108 | 341 |
CY - 1 | 320 | 273 |
CY - 2 | 247 | 159 |
CY - 3 | 133 | 67 |
CY - 4 | 53 | 16 |
Prior | 10 | 0 |
Total | 871 | 856 |
Canada | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 24 | 101 |
CY - 1 | 96 | 83 |
CY - 2 | 77 | 60 |
CY - 3 | 53 | 37 |
CY - 4 | 29 | 14 |
Prior | 9 | 2 |
Total | 288 | 297 |
Europe | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 124 | 390 |
CY - 1 | 348 | 361 |
CY - 2 | 315 | 254 |
CY - 3 | 210 | 123 |
CY - 4 | 92 | 41 |
Prior | 29 | 9 |
Total | 1,118 | 1,178 |
Low Credit Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 179 | 591 |
CY - 1 | 560 | 502 |
CY - 2 | 461 | 362 |
CY - 3 | 310 | 176 |
CY - 4 | 135 | 64 |
Prior | 42 | 9 |
Total | 1,687 | 1,704 |
Low Credit Risk | United States (Direct): | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 46 | 164 |
CY - 1 | 154 | 151 |
CY - 2 | 134 | 128 |
CY - 3 | 111 | 71 |
CY - 4 | 56 | 32 |
Prior | 21 | 4 |
Total | 522 | 550 |
Low Credit Risk | United States (Indirect): | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 57 | 193 |
CY - 1 | 194 | 140 |
CY - 2 | 140 | 79 |
CY - 3 | 69 | 33 |
CY - 4 | 26 | 7 |
Prior | 4 | 0 |
Total | 490 | 452 |
Low Credit Risk | Canada | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 11 | 37 |
CY - 1 | 36 | 34 |
CY - 2 | 31 | 24 |
CY - 3 | 21 | 10 |
CY - 4 | 7 | 5 |
Prior | 3 | 1 |
Total | 109 | 111 |
Low Credit Risk | Europe | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 65 | 197 |
CY - 1 | 176 | 177 |
CY - 2 | 156 | 131 |
CY - 3 | 109 | 62 |
CY - 4 | 46 | 20 |
Prior | 14 | 4 |
Total | 566 | 591 |
Average Credit Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 121 | 399 |
CY - 1 | 360 | 418 |
CY - 2 | 362 | 257 |
CY - 3 | 211 | 125 |
CY - 4 | 97 | 39 |
Prior | 27 | 7 |
Total | 1,178 | 1,245 |
Average Credit Risk | United States (Direct): | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 17 | 54 |
CY - 1 | 53 | 95 |
CY - 2 | 89 | 52 |
CY - 3 | 43 | 26 |
CY - 4 | 20 | 8 |
Prior | 6 | 2 |
Total | 228 | 237 |
Average Credit Risk | United States (Indirect): | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 42 | 129 |
CY - 1 | 110 | 124 |
CY - 2 | 99 | 71 |
CY - 3 | 56 | 31 |
CY - 4 | 24 | 8 |
Prior | 5 | 0 |
Total | 336 | 363 |
Average Credit Risk | Canada | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 10 | 46 |
CY - 1 | 44 | 39 |
CY - 2 | 36 | 26 |
CY - 3 | 23 | 17 |
CY - 4 | 15 | 6 |
Prior | 4 | 1 |
Total | 132 | 135 |
Average Credit Risk | Europe | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 52 | 170 |
CY - 1 | 153 | 160 |
CY - 2 | 138 | 108 |
CY - 3 | 89 | 51 |
CY - 4 | 38 | 17 |
Prior | 12 | 4 |
Total | 482 | 510 |
High Credit Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 37 | 150 |
CY - 1 | 138 | 85 |
CY - 2 | 78 | 61 |
CY - 3 | 53 | 36 |
CY - 4 | 30 | 13 |
Prior | 11 | 4 |
Total | 347 | 349 |
High Credit Risk | United States (Direct): | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 18 | 90 |
CY - 1 | 87 | 42 |
CY - 2 | 39 | 27 |
CY - 3 | 24 | 13 |
CY - 4 | 12 | 5 |
Prior | 5 | 3 |
Total | 185 | 180 |
High Credit Risk | United States (Indirect): | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 9 | 19 |
CY - 1 | 16 | 9 |
CY - 2 | 8 | 9 |
CY - 3 | 8 | 3 |
CY - 4 | 3 | 1 |
Prior | 1 | 0 |
Total | 45 | 41 |
High Credit Risk | Canada | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 3 | 18 |
CY - 1 | 16 | 10 |
CY - 2 | 10 | 10 |
CY - 3 | 9 | 10 |
CY - 4 | 7 | 3 |
Prior | 2 | 0 |
Total | 47 | 51 |
High Credit Risk | Europe | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
CY | 7 | 23 |
CY - 1 | 19 | 24 |
CY - 2 | 21 | 15 |
CY - 3 | 12 | 10 |
CY - 4 | 8 | 4 |
Prior | 3 | 1 |
Total | $ 70 | $ 77 |
Finance Receivables, Net - Agin
Finance Receivables, Net - Aging of Billed Finance Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||
Total | $ 3,212 | $ 3,298 |
Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 96 | 103 |
Unbilled Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 3,116 | 3,195 |
United States | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 1,806 | 1,823 |
United States | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 70 | 76 |
United States | Unbilled Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 1,736 | 1,747 |
Canada | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 288 | 297 |
Canada | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 9 | 10 |
Canada | Unbilled Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 279 | 287 |
Europe | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 1,118 | 1,178 |
Europe | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 17 | 17 |
Europe | Unbilled Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 1,101 | 1,161 |
Current | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 66 | 74 |
Current | United States | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 48 | 54 |
Current | Canada | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 6 | 8 |
Current | Europe | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 12 | 12 |
31-90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 16 | 15 |
31-90 Days Past Due | United States | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 11 | 10 |
31-90 Days Past Due | Canada | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 2 | 2 |
31-90 Days Past Due | Europe | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 3 | 3 |
>90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 14 | 14 |
>90 Days Past Due | United States | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 11 | 12 |
>90 Days Past Due | Canada | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 1 | 0 |
>90 Days Past Due | Europe | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 2 | 2 |
>90 Days and Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable, 90 days or more past due, still accruing | 100 | 109 |
>90 Days and Accruing | United States | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable, 90 days or more past due, still accruing | 70 | 74 |
>90 Days and Accruing | Canada | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable, 90 days or more past due, still accruing | 13 | 12 |
>90 Days and Accruing | Europe | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable, 90 days or more past due, still accruing | 17 | 23 |
Direct | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 935 | 967 |
Direct | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 45 | 48 |
Direct | Unbilled Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 890 | 919 |
Direct | Current | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 30 | 33 |
Direct | 31-90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 7 | 6 |
Direct | >90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 8 | 9 |
Direct | >90 Days and Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable, 90 days or more past due, still accruing | 70 | 74 |
Indirect | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 871 | 856 |
Indirect | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 25 | 28 |
Indirect | Unbilled Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 846 | 828 |
Indirect | Current | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 18 | 21 |
Indirect | 31-90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 4 | 4 |
Indirect | >90 Days Past Due | Billed Revenues | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 3 | 3 |
Indirect | >90 Days and Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable, 90 days or more past due, still accruing | $ 0 | $ 0 |
Finance Receivables, Net - Secu
Finance Receivables, Net - Secured Borrowings and Collateral (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Jul. 31, 2020 |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Finance receivables, net | $ 3,077 | $ 3,165 | |
Special Purpose Entity (SPE) | Secured Loan Agreement 1 | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Finance receivables, net | 248 | ||
Special Purpose Entity (SPE) | Secured Loan Agreement 2 | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Finance receivables, net | $ 543 | ||
Special Purpose Entity (SPE) | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Financing receivables sold | $ 610 | $ 355 |
Inventories and Equipment on _3
Inventories and Equipment on Operating Leases, Net - Summary of Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventories, net [Abstract] | ||
Finished goods | $ 697 | $ 707 |
Work-in-process | 48 | 43 |
Raw materials | 96 | 93 |
Total Inventories | $ 841 | $ 843 |
Inventories and Equipment on _4
Inventories and Equipment on Operating Leases, Net - Equipment on Operating Leases and Accumulated Depreciation (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventories and Equipment on Operating Leases, Net [Abstract] | ||
Equipment on operating leases | $ 1,332 | $ 1,376 |
Accumulated depreciation | (1,055) | (1,080) |
Equipment on operating leases, net | $ 277 | $ 296 |
Inventories and Equipment on _5
Inventories and Equipment on Operating Leases, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Inventories and Equipment on Operating Leases, Net [Abstract] | ||
Contingent rentals on operating lease, total | $ 15 | $ 22 |
Lessee - Additional Information
Lessee - Additional Information (Details) $ in Millions | Mar. 31, 2021USD ($)optionlease |
Leases [Abstract] | |
Remaining terms of leases (years) | 12 years |
Number of additional leases not yet commenced | lease | 1 |
Lease obligation not yet commenced | $ 8 |
ROU asset not yet commenced | $ 8 |
Operating lease, not yet commenced, term of lease | 6 years |
Number of options to terminate lease | option | 1 |
Operating lease, not yet commenced, option to terminate, period | 3 years |
Lessee - Components of Lease Ex
Lessee - Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease expense | $ 27 | $ 28 |
Short-term lease expense | 5 | 5 |
Variable lease expense | 12 | 12 |
Sublease income | (1) | 0 |
Total Lease expense | $ 43 | $ 45 |
Lessee - Operating Lease ROU As
Lessee - Operating Lease ROU Asset, Net and Operating Lease Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease, Other long-term assets | $ 287 | $ 310 |
Operating lease, Accrued expenses and other current liabilities | 79 | 83 |
Operating lease, Other long-term liabilities | 231 | 250 |
Total Operating lease liabilities | $ 310 | $ 333 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other long-term assets | Other long-term assets |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Restructuring Programs - Additi
Restructuring Programs - Additional Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021USD ($)employee | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||
Net restructuring and asset impairment charges | $ 21 | ||
Restructuring charges | $ 25 | ||
Headcount reductions, number of employees | employee | 350 | ||
Restructuring charges, net reversals | $ 4 | ||
Payments for restructuring | 27 | $ 35 | |
Restructuring related reserve | 13 | $ 21 | |
HCL Technologies | |||
Restructuring Cost and Reserve [Line Items] | |||
Payments for restructuring | 3 | $ 0 | |
Severance and Related Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Net restructuring and asset impairment charges | 10 | ||
Restructuring charges | 14 | ||
Restructuring charges, net reversals | 4 | ||
Other Contractual Termination Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Net restructuring and asset impairment charges | 1 | ||
Restructuring charges | 1 | ||
Restructuring charges, net reversals | 0 | ||
Asset Impairments | |||
Restructuring Cost and Reserve [Line Items] | |||
Net restructuring and asset impairment charges | 10 | ||
Restructuring charges | 10 | ||
Restructuring charges, net reversals | $ 0 |
Restructuring Programs - Inform
Restructuring Programs - Information Related to Restructuring Program Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | $ 82 | |
Provision | 25 | |
Reversals | (4) | |
Net current period charges | 21 | |
Charges against reserve and currency | (40) | $ (35) |
Balance at end of period | 63 | |
Leased right-of-use asset write-off | 1 | |
Owned asset write-off | 9 | |
Severance and Related Costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 78 | |
Provision | 14 | |
Reversals | (4) | |
Net current period charges | 10 | |
Charges against reserve and currency | (29) | |
Balance at end of period | 59 | |
Other Contractual Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 4 | |
Provision | 1 | |
Reversals | 0 | |
Net current period charges | 1 | |
Charges against reserve and currency | (1) | |
Balance at end of period | 4 | |
Asset Impairments | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 0 | |
Provision | 10 | |
Reversals | 0 | |
Net current period charges | 10 | |
Charges against reserve and currency | (10) | |
Balance at end of period | $ 0 |
Restructuring Programs - Summar
Restructuring Programs - Summary Of Reconciliation to Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | ||
Charges against reserve and currency | $ (40) | $ (35) |
Effects of foreign currency and other non-cash items | 13 | 0 |
Restructuring cash payments | $ (27) | $ (35) |
Restructuring Programs - Certai
Restructuring Programs - Certain Related Costs Incurred in Connection with Restructuring Programs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Related restructuring costs | $ (4) | $ 12 |
Retention related severance/bonuses | ||
Restructuring Cost and Reserve [Line Items] | ||
Related restructuring costs | (4) | 7 |
Contractual severance costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Related restructuring costs | 0 | 4 |
Consulting and other costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Related restructuring costs | $ 0 | $ 1 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Millions | Aug. 24, 2020 | Feb. 28, 2021 | Aug. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Jul. 31, 2020 |
Secured Borrowings and Collateral [Abstract] | |||||||
Interest payable | $ 10 | ||||||
Interest expense | 52 | $ 51 | |||||
2025 Senior Notes | Senior Notes | |||||||
Secured Borrowings and Collateral [Abstract] | |||||||
Debt value | $ 200 | $ 550 | |||||
Debt interest rate, percent | 5.00% | ||||||
Issuance price | 100.75% | ||||||
2028 Senior Notes | Senior Notes | |||||||
Secured Borrowings and Collateral [Abstract] | |||||||
Debt value | $ 200 | $ 550 | |||||
Debt interest rate, percent | 5.50% | ||||||
Issuance price | 102.50% | ||||||
2025 And 2028 Senior Notes | Senior Notes | |||||||
Secured Borrowings and Collateral [Abstract] | |||||||
Proceeds, net of fees and expenses | $ 405 | $ 1,089 | |||||
Related party debt | 1,494 | ||||||
Xerox Holdings Corporation | 2025 And 2028 Senior Notes | Senior Notes | |||||||
Secured Borrowings and Collateral [Abstract] | |||||||
Proceeds, net of fees and expenses | $ 1,494 | $ 1,494 | |||||
XEROX CORPORATION | 2020 Senior Notes | Senior Notes | |||||||
Secured Borrowings and Collateral [Abstract] | |||||||
Interest expense | $ 20 | ||||||
Special Purpose Entity (SPE) | |||||||
Secured Borrowings and Collateral [Abstract] | |||||||
Effective interest rate | 1.69% | ||||||
Secured debt | $ 340 | ||||||
Special Purpose Entity (SPE) | |||||||
Secured Borrowings and Collateral [Abstract] | |||||||
Financing receivables sold | $ 610 | 355 | |||||
Effective interest rate | 1.73% | ||||||
Secured debt | $ 500 | ||||||
Special Purpose Entity (SPE) | Special Purpose Entity (SPE) | |||||||
Secured Borrowings and Collateral [Abstract] | |||||||
Net book value of rights to payments under operating leases sold | $ 10 |
Debt - Special Purpose Entity (
Debt - Special Purpose Entity (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Billed portion of finance receivables, net | $ 4,000,000 | $ 4,000,000 |
Finance receivables, net | 1,065,000,000 | 1,082,000,000 |
Finance receivables due after one year, net | 1,920,000,000 | 1,984,000,000 |
Equipment on operating leases, net | 277,000,000 | 296,000,000 |
Total Assets | 14,272,000,000 | 14,741,000,000 |
Current portion of long-term debt, net | 678,000,000 | 394,000,000 |
Long-term debt | 3,674,000,000 | 4,050,000,000 |
Total Liabilities | 8,629,000,000 | 8,931,000,000 |
Special Purpose Entity (SPE) | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Billed portion of finance receivables, net | 25,000,000 | 28,000,000 |
Finance receivables, net | 326,000,000 | 350,000,000 |
Finance receivables due after one year, net | 440,000,000 | 510,000,000 |
Equipment on operating leases, net | 6,000,000 | 8,000,000 |
Restricted cash | 43,000,000 | 22,000,000 |
Total Assets | 840,000,000 | 918,000,000 |
Current portion of long-term debt, net | 380,000,000 | 394,000,000 |
Long-term debt | 290,000,000 | 370,000,000 |
Total Liabilities | 670,000,000 | $ 764,000,000 |
Debt issuance costs | $ 3,000,000 |
Debt - Interest Expense and Inc
Debt - Interest Expense and Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Interest expense | $ 52 | $ 51 |
Interest income | 56 | $ 67 |
2020 Senior Notes | Senior Notes | XEROX CORPORATION | ||
Debt Instrument [Line Items] | ||
Interest expense | $ 20 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Derivative [Line Items] | |||
Notional amount | $ 968 | $ 1,161 | |
Average maturity of foreign exchange hedging contract - within three months (as a percent of total contracts) | 78.00% | ||
Average maturity of foreign exchange hedging contract - within three and six months (as a percent of total contracts) | 11.00% | ||
Average maturity of foreign exchange hedging contract - within six and twelve months (as a percent of total contracts) | 11.00% | ||
Net asset fair value | $ (10) | 2 | |
Net loss recorded in AOCL expected to be reclassified to net income in the future | (5) | ||
Foreign currency transaction losses, before tax | (2) | $ (2) | |
Derivatives Designated as Hedging Instruments | |||
Derivative [Line Items] | |||
Net asset fair value | (7) | 2 | |
Cash Flow Hedging | Foreign exchange contracts - forwards | Cost of Sales | |||
Derivative [Line Items] | |||
Hedge ineffectiveness | 0 | 0 | |
Derivative, underlying exposure | 0 | $ 0 | |
Cash Flow Hedging | Derivatives Designated as Hedging Instruments | |||
Derivative [Line Items] | |||
Net asset fair value | $ (7) | $ 2 |
Financial Instruments - Summary
Financial Instruments - Summary of Derivative Instruments Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Assets | $ 4 | $ 7 |
Derivative Liabilities | (14) | (5) |
Net derivative asset (liability) | (10) | 2 |
Derivatives Designated as Hedging Instruments | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net derivative asset (liability) | (7) | 2 |
Derivatives Designated as Hedging Instruments | Other current assets | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Assets | 1 | 3 |
Derivatives Designated as Hedging Instruments | Other current assets | Foreign currency options | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Assets | 0 | 1 |
Derivatives Designated as Hedging Instruments | Accrued expenses and other current liabilities | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Liabilities | (8) | (2) |
Not Designated as Hedging Instrument | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Net derivative asset (liability) | (3) | 0 |
Not Designated as Hedging Instrument | Other current assets | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Assets | 3 | 3 |
Not Designated as Hedging Instrument | Accrued expenses and other current liabilities | Foreign exchange contracts - forwards | ||
Summary Of Derivative Instruments By Hedge Designation [Abstract] | ||
Derivative Liabilities | $ (6) | $ (3) |
Financial Instruments - Summa_2
Financial Instruments - Summary of Derivative Instruments Gain (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Interest Rate Contract | Fair Value Hedges | Interest Expense | ||
Summary of Derivative Instruments Gains (Losses) [Abstract] | ||
Derivative loss recognized in interest expense | $ 0 | $ (1) |
Hedged item gain recognized in interest expense | 0 | 1 |
Foreign exchange contracts - forwards | Cash Flow Hedges | ||
Summary of Derivative Instruments Gains (Losses) [Abstract] | ||
Derivative (loss) gain recognized in OCI (effective portion) | (10) | 7 |
Foreign exchange contracts - forwards | Cash Flow Hedges | Cost of Sales | ||
Summary of Derivative Instruments Gains (Losses) [Abstract] | ||
Derivative loss reclassified from AOCL to income - Cost of sales (effective portion) | $ (1) | $ (1) |
Financial Instruments - Summa_3
Financial Instruments - Summary of Gains (Losses) Non-designated Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Foreign exchange contracts - forwards | Other expense – Currency (losses) gains, net | Not Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (losses) on non-designated derivative instruments | $ (18) | $ 14 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Recurring (Details) - Recurring - Level 2 - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Deferred compensation plan investments in mutual funds | $ 17 | $ 18 |
Total | 21 | 25 |
Liabilities | ||
Deferred compensation plan liabilities | 17 | 17 |
Total | 31 | 22 |
Foreign exchange contracts - forwards | ||
Assets | ||
Foreign currency contracts - assets | 4 | 6 |
Liabilities | ||
Foreign exchange contracts - forwards | 14 | 5 |
Foreign currency options | ||
Assets | ||
Foreign currency contracts - assets | $ 0 | $ 1 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Nonrecurring (Details) - Nonrecurring - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 2,379 | $ 2,625 |
Accounts receivable, net | 781 | 883 |
Short-term debt and current portion of long-term debt | 678 | 394 |
Long-term debt | 3,674 | 4,050 |
Carrying Amount | Xerox Holdings Corporation | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 1,494 | 1,493 |
Carrying Amount | XEROX CORPORATION | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 1,890 | 2,187 |
Carrying Amount | Other Subsidiaries | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 290 | 370 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 2,379 | 2,625 |
Accounts receivable, net | 781 | 883 |
Short-term debt and current portion of long-term debt | 688 | 396 |
Long-term debt | 3,842 | 4,266 |
Fair Value | Xerox Holdings Corporation | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 1,558 | 1,596 |
Fair Value | XEROX CORPORATION | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 1,992 | 2,298 |
Fair Value | Other Subsidiaries | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 292 | $ 372 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of Net Periodic Benefit Costs: | ||||
Defined benefit pension cost | $ 0 | $ 24,000,000 | ||
Forecast | ||||
Contributions [Abstract] | ||||
Expected reduction in defined contribution plan expense | $ 20,000,000 | |||
Pension Plan | ||||
Contributions [Abstract] | ||||
Defined benefit plan, contributions by employer | 35,000,000 | 33,000,000 | $ 139,000,000 | |
Defined benefit plan, expected future employer contributions | 130,000,000 | |||
Pension Plan | U.S. | ||||
Components of Net Periodic Benefit Costs: | ||||
Service cost | 0 | 1,000,000 | ||
Interest cost | 18,000,000 | 23,000,000 | ||
Expected return on plan assets | (28,000,000) | (26,000,000) | ||
Recognized net actuarial loss | 5,000,000 | 7,000,000 | ||
Amortization of prior service credit | 0 | 0 | ||
Recognized settlement loss | 15,000,000 | 19,000,000 | ||
Recognized curtailment gain | 0 | 0 | ||
Defined benefit pension cost | 10,000,000 | 24,000,000 | ||
Defined contribution plans | 0 | 5,000,000 | ||
Net Periodic Benefit Cost (Credit) | 10,000,000 | 29,000,000 | ||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss): | ||||
Net actuarial loss (gain) | (44,000,000) | 12,000,000 | ||
Amortization of net actuarial (loss) gain | (20,000,000) | (26,000,000) | ||
Amortization of net prior service credit | 0 | 0 | ||
Total Recognized in Other Comprehensive Income (Loss) | (64,000,000) | (14,000,000) | ||
Total Recognized in Net Periodic Benefit (Credit) Cost and Other Comprehensive Income (Loss) | (54,000,000) | 15,000,000 | ||
Contributions [Abstract] | ||||
Defined benefit plan, contributions by employer | 6,000,000 | 6,000,000 | 35,000,000 | |
Defined benefit plan, expected future employer contributions | 25,000,000 | |||
Pension Plan | U.S. | Qualified Plan | ||||
Contributions [Abstract] | ||||
Mandatory future contributions | 0 | |||
Pension Plan | Non-U.S. | ||||
Components of Net Periodic Benefit Costs: | ||||
Service cost | 5,000,000 | 5,000,000 | ||
Interest cost | 22,000,000 | 29,000,000 | ||
Expected return on plan assets | (52,000,000) | (47,000,000) | ||
Recognized net actuarial loss | 15,000,000 | 14,000,000 | ||
Amortization of prior service credit | 0 | 0 | ||
Recognized settlement loss | 0 | 0 | ||
Recognized curtailment gain | 0 | (1,000,000) | ||
Defined benefit pension cost | (10,000,000) | 0 | ||
Defined contribution plans | 5,000,000 | 5,000,000 | ||
Net Periodic Benefit Cost (Credit) | (5,000,000) | 5,000,000 | ||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss): | ||||
Net actuarial loss (gain) | 1,000,000 | 0 | ||
Amortization of net actuarial (loss) gain | (15,000,000) | (14,000,000) | ||
Amortization of net prior service credit | 0 | 0 | ||
Total Recognized in Other Comprehensive Income (Loss) | (14,000,000) | (14,000,000) | ||
Total Recognized in Net Periodic Benefit (Credit) Cost and Other Comprehensive Income (Loss) | (19,000,000) | (9,000,000) | ||
Contributions [Abstract] | ||||
Defined benefit plan, contributions by employer | 29,000,000 | 27,000,000 | 104,000,000 | |
Defined benefit plan, expected future employer contributions | 105,000,000 | |||
Retiree Health | ||||
Components of Net Periodic Benefit Costs: | ||||
Service cost | 1,000,000 | 1,000,000 | ||
Interest cost | 2,000,000 | 2,000,000 | ||
Expected return on plan assets | 0 | 0 | ||
Recognized net actuarial loss | 0 | 0 | ||
Amortization of prior service credit | (17,000,000) | (19,000,000) | ||
Recognized settlement loss | 0 | 0 | ||
Recognized curtailment gain | 0 | 0 | ||
Defined benefit pension cost | (14,000,000) | (16,000,000) | ||
Net Periodic Benefit Cost (Credit) | (14,000,000) | (16,000,000) | ||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss): | ||||
Net actuarial loss (gain) | 0 | 0 | ||
Amortization of net actuarial (loss) gain | 0 | 0 | ||
Amortization of net prior service credit | 17,000,000 | 19,000,000 | ||
Total Recognized in Other Comprehensive Income (Loss) | 17,000,000 | 19,000,000 | ||
Total Recognized in Net Periodic Benefit (Credit) Cost and Other Comprehensive Income (Loss) | 3,000,000 | 3,000,000 | ||
Contributions [Abstract] | ||||
Defined benefit plan, contributions by employer | $ 6,000,000 | $ 5,000,000 | 25,000,000 | |
Defined benefit plan, expected future employer contributions | $ 30,000,000 |
Shareholders' Equity of Xerox_3
Shareholders' Equity of Xerox Holdings - Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | $ 5,596 | $ 5,594 |
Comprehensive income (loss), net | 36 | (140) |
Cash dividends declared - common | (49) | (54) |
Cash dividends declared - preferred | (4) | (4) |
Stock option and incentive plans, net | 12 | 4 |
Payments to acquire treasury stock, including fees | (162) | |
Cancellation of treasury stock | 0 | |
Balance at end of period | $ 5,429 | $ 5,400 |
Dividends per common share (in dollars per share) | $ 0.25 | $ 0.25 |
Dividends per preferred share (in dollars per share) | $ 20 | $ 20 |
Xerox Holdings/Xerox Shareholders’ Equity | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | $ 5,592 | $ 5,587 |
Comprehensive income (loss), net | 36 | (140) |
Cash dividends declared - common | (49) | (54) |
Cash dividends declared - preferred | (4) | (4) |
Stock option and incentive plans, net | 12 | 4 |
Payments to acquire treasury stock, including fees | (162) | |
Balance at end of period | 5,425 | 5,393 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 198 | 215 |
Stock option and incentive plans, net | 1 | |
Cancellation of treasury stock | (2) | |
Balance at end of period | $ 199 | 213 |
Par value (in dollars per share) | $ 1 | |
Additional Paid-in Capital | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | $ 2,445 | 2,782 |
Stock option and incentive plans, net | 11 | 4 |
Cancellation of treasury stock | (74) | |
Balance at end of period | 2,456 | 2,712 |
Treasury Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 0 | (76) |
Payments to acquire treasury stock, including fees | (162) | |
Cancellation of treasury stock | 0 | 76 |
Balance at end of period | (162) | 0 |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 6,281 | 6,312 |
Comprehensive income (loss), net | 39 | (2) |
Cash dividends declared - common | (49) | (54) |
Cash dividends declared - preferred | (4) | (4) |
Balance at end of period | 6,267 | 6,252 |
AOCL | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | (3,332) | (3,646) |
Comprehensive income (loss), net | (3) | (138) |
Balance at end of period | (3,335) | (3,784) |
Non-controlling Interests | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 4 | 7 |
Comprehensive income (loss), net | 0 | 0 |
Balance at end of period | $ 4 | $ 7 |
Shareholders' Equity of Xerox_4
Shareholders' Equity of Xerox Holdings - Treasury Stock (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Increase (Decrease) In Treasury Stock [Roll Forward] | ||
Beginning balance (in shares) | 0 | |
Ending balance (in shares) | 6,704 | |
Beginning balance | $ 0 | |
Purchases | 162 | |
Cancellations | $ 0 | |
Ending balance | $ 162 | |
Treasury Stock | ||
Increase (Decrease) In Treasury Stock [Roll Forward] | ||
Beginning balance (in shares) | 0 | |
Purchases (in shares) | 6,704 | |
Cancellations (in shares) | 0 | |
Ending balance (in shares) | 6,704 | |
Beginning balance | $ 0 | |
Purchases | 162 | |
Cancellations | 0 | $ 76 |
Ending balance | $ 162 |
Shareholders' Equity of Xerox_5
Shareholders' Equity of Xerox (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | $ 5,596 | $ 5,594 |
Comprehensive income (loss), net | 36 | (140) |
Balance at end of period | 5,429 | 5,400 |
XEROX CORPORATION | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 7,385 | 5,874 |
Comprehensive income (loss), net | 38 | (140) |
Dividends declared to parent | (201) | (290) |
Intercompany loan capitalization | (1,494) | |
Transfers (to) from Parent | (34) | 238 |
Balance at end of period | 5,694 | 5,682 |
Xerox Holdings/Xerox Shareholders’ Equity | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 5,592 | 5,587 |
Comprehensive income (loss), net | 36 | (140) |
Balance at end of period | 5,425 | 5,393 |
Xerox Holdings/Xerox Shareholders’ Equity | XEROX CORPORATION | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 7,381 | 5,867 |
Comprehensive income (loss), net | 38 | (140) |
Dividends declared to parent | (201) | (290) |
Intercompany loan capitalization | (1,494) | |
Transfers (to) from Parent | (34) | 238 |
Balance at end of period | 5,690 | 5,675 |
Additional Paid-in Capital | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 2,445 | 2,782 |
Balance at end of period | 2,456 | 2,712 |
Additional Paid-in Capital | XEROX CORPORATION | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 4,879 | 3,266 |
Intercompany loan capitalization | (1,494) | |
Transfers (to) from Parent | (34) | 238 |
Balance at end of period | 3,351 | 3,504 |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 6,281 | 6,312 |
Comprehensive income (loss), net | 39 | (2) |
Balance at end of period | 6,267 | 6,252 |
Retained Earnings | XEROX CORPORATION | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 5,834 | 6,247 |
Comprehensive income (loss), net | 41 | (2) |
Dividends declared to parent | (201) | (290) |
Balance at end of period | 5,674 | 5,955 |
AOCL | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | (3,332) | (3,646) |
Comprehensive income (loss), net | (3) | (138) |
Balance at end of period | (3,335) | (3,784) |
AOCL | XEROX CORPORATION | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | (3,332) | (3,646) |
Comprehensive income (loss), net | (3) | (138) |
Balance at end of period | (3,335) | (3,784) |
Non-controlling Interests | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 4 | 7 |
Comprehensive income (loss), net | 0 | 0 |
Balance at end of period | 4 | 7 |
Non-controlling Interests | XEROX CORPORATION | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 4 | 7 |
Comprehensive income (loss), net | 0 | |
Balance at end of period | $ 4 | $ 7 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) - (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Xerox Holdings/Xerox | [1] | $ (3) | $ (138) |
Translation adjustments losses | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), pre-tax | (52) | (204) | |
Other Comprehensive Loss, Net | (51) | (197) | |
Unrealized (Losses) Gains | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), pre-tax | (9) | 8 | |
Other Comprehensive Loss, Net | (7) | 5 | |
Other comprehensive income (loss), before reclassifications, pre-tax | (10) | 7 | |
Other comprehensive income (loss), before reclassifications, net of tax | (8) | 4 | |
Reclassifications, pre-tax | 1 | 1 | |
Reclassifications, net of tax | 1 | 1 | |
Net actuarial/prior service gains (losses) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), pre-tax | 43 | (12) | |
Other Comprehensive Loss, Net | 32 | (9) | |
Prior service amortization | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), pre-tax | (17) | (19) | |
Other Comprehensive Loss, Net | (12) | (14) | |
Actuarial loss amortization / settlement | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), pre-tax | 35 | 40 | |
Other Comprehensive Loss, Net | 26 | 30 | |
Other gains | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), pre-tax | 9 | 47 | |
Other Comprehensive Loss, Net | 9 | 47 | |
Changes in Defined Benefit Plans Gains | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), pre-tax | 70 | 56 | |
Other Comprehensive Loss, Net | 55 | 54 | |
Other Comprehensive Income (Loss) Attributable to Xerox Holdings/Xerox | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other Comprehensive Income (Loss) Attributable to Xerox Holdings/Xerox | 9 | (140) | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Xerox Holdings/Xerox | $ (3) | $ (138) | |
[1] | Refer to Note 17 - Other Comprehensive Income (Loss) for gross components of Other comprehensive loss, net, reclassification adjustments out of Accumulated other comprehensive loss and related tax effects. |
Other Comprehensive Income (L_4
Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Loss (AOCL) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | $ 5,429 | $ 5,596 | $ 5,400 | $ 5,594 |
Cumulative translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | (1,771) | (1,720) | ||
Other unrealized (losses) gains, net | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | (5) | 2 | ||
Benefit plans net actuarial losses and prior service credits | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | (1,559) | (1,614) | ||
Total Accumulated Other Comprehensive Loss Attributable to Xerox Holdings/Xerox | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | $ (3,335) | $ (3,332) | $ (3,784) | $ (3,646) |
Earnings_(Loss) per Share - Com
Earnings (Loss) per Share - Computation of Basic and Diluted Earnings (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Basic Earnings (Loss) per Share | ||
Net Income (Loss) Attributable to Xerox Holdings | $ 39 | $ (2) |
Accrued dividends on preferred stock | (4) | (4) |
Adjusted Net income (loss) available to common shareholders | $ 35 | $ (6) |
Weighted average common shares outstanding (in shares) | 195,985 | 212,750 |
Basic earnings (loss) per share (USD per share) | $ 0.18 | $ (0.03) |
Diluted Earnings (Loss) per Share | ||
Net Income (Loss) Attributable to Xerox Holdings | $ 39 | $ (2) |
Accrued dividends on preferred stock | (4) | (4) |
Adjusted Net income (loss) available to common shareholders | $ 35 | $ (6) |
Weighted average common shares outstanding (in shares) | 195,985 | 212,750 |
Common shares issuable with respect to: | ||
Adjusted Weighted average common shares outstanding (in shares) | 198,166 | 212,750 |
Diluted earnings (loss) per share (USD per share) | $ 0.18 | $ (0.03) |
Stock options | ||
Common shares issuable with respect to: | ||
Common shares attributable to dilutive effect of share-based payments (in shares) | 0 | 0 |
Restricted stock and performance shares | ||
Common shares issuable with respect to: | ||
Common shares attributable to dilutive effect of share-based payments (in shares) | 2,181 | 0 |
Convertible preferred stock | ||
Common shares issuable with respect to: | ||
Common shares attributable to dilutive effect of share-based payments (in shares) | 0 | 0 |
Earnings_(Loss) per Share - Ant
Earnings (Loss) per Share - Anti-Dilutive Securities (Details) - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 12,762 | 14,069 |
Dividends per common share (in dollars per share) | $ 0.25 | $ 0.25 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 693 | 849 |
Restricted stock and performance shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 5,327 | 6,478 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 6,742 | 6,742 |
Contingencies and Litigation -
Contingencies and Litigation - Brazilian Tax Contingencies (Details) - Brazil Contingencies - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | ||
Tax contingency - unreserved | $ 335 | $ 355 |
Escrow cash deposits | 35 | 39 |
Surety bonds | 96 | 112 |
Letters of credit | 72 | 78 |
Liens on Brazilian assets | $ 0 | $ 0 |
Contingencies and Litigation _2
Contingencies and Litigation - Other Pending Litigation (Details) $ in Thousands | Apr. 07, 2021USD ($) | Dec. 13, 2019USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2021USD ($) | Mar. 10, 2021USD ($)request |
Guarantor Obligations [Line Items] | |||||
Number of requests | request | 2 | ||||
Ribbe v. Jacobson, et al. | Subsequent Event | |||||
Guarantor Obligations [Line Items] | |||||
Loss contingency, damages sought | $ 1,500 | ||||
Loss contingency, benefits sought | $ 10 | ||||
HP Inc. | Miami Firefighters Relief Pension Fund V. Icahn Et Al | |||||
Guarantor Obligations [Line Items] | |||||
Marketable securities, gain (loss) | $ 128,000 | ||||
Xerox Holdings Corporation | |||||
Guarantor Obligations [Line Items] | |||||
Per-occurrence coverage | $ 1,000,000 | ||||
Projected pandemic related losses | $ 300,000 | ||||
Performance Guarantee | |||||
Guarantor Obligations [Line Items] | |||||
Maximum exposure, undiscounted | $ 277,000 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event $ in Millions | 1 Months Ended |
Apr. 30, 2021USD ($) | |
Subsequent Event [Line Items] | |
Upfront prepaid fixed royalty | $ 100 |
Upfront payments | $ 100 |
Expected timing of revenue recognition | 2 years |
Office Equipment Dealer | |
Subsequent Event [Line Items] | |
Acquisition | $ 30 |
Trademark | |
Subsequent Event [Line Items] | |
Duration of trademark use | 2 years |