View Filing Data

Less: Net income attributable to noncontrolling interests

(3)

(64)

Net Income (Loss)

184

(31)

378

216

Net Income (Loss) Attributable to Xerox

181

(34)

370

203

Net income (loss) from continuing operations

181

(31)

370

267

Net loss from discontinued operations attributable to Xerox

$ 0

$ (3)

$ 0

$ (64)

Basic Earnings (Loss) per Share:

Continuing operations (dollars per share)

$ 0.17

$ (0.04)

$ 0.35

$ 0.23

Discontinued operations (dollars per share)

0.00

(0.06)

Total Basic Earnings (Loss) per Share (in dollars per share)

0.17

(0.04)

0.35

0.17

Diluted Earnings (Loss) per Share:

Continuing operations (dollars per share)

0.17

(0.04)

0.34

0.23

Discontinued operations (dollars per share)

0.00

(0.06)

Total Diluted Earnings (Loss) per Share (in dollars per share)

$ 0.17

$ (0.04)

$ 0.34

$ 0.17

[1]

Separation costs are expenses incurred in connection with Xerox's planned separation into two independent, publicly-traded companies. These costs are primarily for third-party investment banking, accounting, legal, consulting and other similar types of services. Refer to Note 1 - Basis of Presentation for additional information regarding Xerox's planned separation.

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2016

Sep. 30, 2015

Sep. 30, 2016

Sep. 30, 2015

Statement of Comprehensive Income [Abstract]

Net income (loss)

$ 184

$ (31)

$ 378

$ 216

Less: Net income attributable to noncontrolling interests

Net Income (Loss) Attributable to Xerox

181

(34)

370

203

Other Comprehensive (Loss) Income, Net:

Translation adjustments, net

^[1]

(22)

(206)

(521)

Unrealized (losses) gains, net

^[1]

(9)

Changes in defined benefit plans, net

^[1]

(15)

(107)

262

Other Comprehensive (Loss) Income, Net

^[1]

(46)

(101)

(241)

Less: Other comprehensive loss, net attributable to noncontrolling interests

(1)

Other Comprehensive (Loss) Income, Net Attributable to Xerox

(46)

(100)

(240)

Comprehensive Income (Loss), Net

Comprehensive Income (Loss), Net

138

(132)

387

(25)

Less: Comprehensive income, net attributable to noncontrolling interests

Comprehensive Income (Loss), Net Attributable to Xerox

$ 135

$ (134)

$ 380

$ (37)

[1]	Refer to Note 15 - Other Comprehensive (Loss) Income for gross components of Other Comprehensive (Loss) Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.

Condensed Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Assets, Current [Abstract]
Cash and cash equivalents	$ 1,423	$ 1,368
Accounts receivable, net	2,466	2,319
Billed portion of finance receivables, net	99	97
Finance receivables, net	1,279	1,315
Inventories	1,019	942
Other current assets	721	644
Total current assets	7,007	6,685
Finance receivables due after one year, net	2,457	2,576
Equipment on operating leases, net	488	495
Land, buildings and equipment, net	958	996
Investments in affiliates, at equity	1,524	1,389
Intangible assets, net	1,528	1,765
Goodwill	8,688	8,823
Other long-term assets	1,992	2,060
Total Assets	24,642	24,789
Liabilities, Current [Abstract]
Short-term debt and current portion of long-term debt	2,033	985
Accounts payable	1,312	1,614
Accrued compensation and benefits costs	647	651
Unearned income	401	428
Other current liabilities	1,389	1,576
Total current liabilities	5,782	5,254
Long-term debt	5,346	6,354
Pension and other benefit liabilities	2,738	2,513
Post-retirement medical benefits	744	785
Other long-term liabilities	389	417
Total Liabilities	14,999	15,323
Commitments and Contingencies
Series A Convertible Preferred Stock	349	349
Common stock	1,014	1,013
Additional paid-in capital	3,071	3,017
Retained earnings	9,801	9,686
Accumulated other comprehensive loss	(4,632)	(4,642)
Xerox shareholders’ equity	9,254	9,074
Noncontrolling interests	40	43
Total Equity	9,294	9,117
Total Liabilities and Equity	$ 24,642	$ 24,789
Shares of common stock issued and outstanding (in shares)	1,013,777	1,012,836

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Cash Flows from Operating Activities:
Net income (loss)	$ 184	$ (31)	$ 378	$ 216
Adjustments required to reconcile net income (loss) to cash flows from operating activities:
Depreciation and amortization	275	317	843	910
Provision for receivables	15	16	42	48
Provision for inventory	6	8	21	24
Net (gain) loss on sales of businesses and assets	(2)	5	(18)	67
Undistributed equity in net income of unconsolidated affiliates	(36)	(37)	(64)	(71)
Stock-based compensation	22	(8)	49	37
Restructuring and asset impairment charges	13	20	199	191
Payments for restructurings	(55)	(20)	(120)	(81)
Defined benefit pension cost	32	29	108	102
Contributions to defined benefit pension plans	(35)	(50)	(106)	(148)
(Increase) decrease in accounts receivable and billed portion of finance receivables	(44)	115	(312)	(130)
Collections of deferred proceeds from sales of receivables	58	58	191	192
Increase in inventories	(12)	(61)	(104)	(254)
Increase in equipment on operating leases	(74)	(71)	(204)	(210)
Decrease (increase) in finance receivables	53	(30)	138	48
Collections on beneficial interest from sales of finance receivables	5	10	20	37
Decrease (increase) in other current and long-term assets	17	(34)	(43)	(94)
Decrease in accounts payable and accrued compensation	(92)	(96)	(397)	(207)
(Decrease) increase in other current and long-term liabilities	(29)	271	(215)	188
Net change in income tax assets and liabilities	(19)	(142)	(93)	(93)
Net change in derivative assets and liabilities	49	(19)	0	(17)
Other operating, net	39	21	209	(22)
Net cash provided by operating activities	370	271	522	733
Cash Flows from Investing Activities:
Cost of additions to land, buildings and equipment	(52)	(39)	(153)	(191)
Proceeds from sales of land, buildings and equipment	3	7	23	23
Cost of additions to internal use software	(21)	(26)	(65)	(71)
Proceeds from sale of businesses	0	6	(53)	939
Acquisitions, net of cash acquired	0	(153)	(18)	(201)
Other investing, net	1	(1)	5	28
Net cash (used in) provided by investing activities	(69)	(206)	(261)	527
Cash Flows from Financing Activities:
Net proceeds (payments) on short-term debt	2	(463)	1,000	51
Proceeds from issuance of long-term debt	5	398	14	1,071
Payments on long-term debt	(8)	(9)	(973)	(1,293)
Common stock dividends	(79)	(84)	(228)	(231)
Preferred stock dividends	(6)	(6)	(18)	(18)
Proceeds from issuances of common stock	3	3	6	17
Excess tax benefits from stock-based compensation	0	14	0	17
Payments to acquire treasury stock, including fees	0	(691)	0	(1,302)
Repurchases related to stock-based compensation	0	(49)	0	(50)
Distributions to noncontrolling interests	(1)	(1)	(13)	(57)
Other financing	0	0	(1)	(1)
Net cash used in financing activities	(84)	(888)	(213)	(1,796)
Effect of exchange rate changes on cash and cash equivalents	3	(14)	7	(71)
Increase (decrease) in cash and cash equivalents	220	(837)	55	(607)
Cash and cash equivalents at beginning of period	1,203	1,641	1,368	1,411
Cash and Cash Equivalents at End of Period	$ 1,423	$ 804	$ 1,423	$ 804

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation References herein to “we,” “us,” “our,” the “Company” and “Xerox” refer to Xerox Corporation and its consolidated subsidiaries unless the context suggests otherwise. We have prepared the accompanying unaudited Condensed Consolidated Financial Statements in accordance with the accounting policies described in our 2015 Annual Report on Form 10-K (2015 Annual Report), 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 have been condensed or omitted. You should read these Condensed Consolidated Financial Statements in conjunction with the Consolidated Financial Statements included in our 2015 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. 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).” Separation Update On January 29, 2016, Xerox announced plans for the complete legal and structural separation of the Company's Business Process Outsourcing (BPO) business, to be named Conduent Incorporated (Conduent), from its Document Technology and Document Outsourcing (DT/DO) business, which will retain the Xerox Corporation name. Each of the businesses will operate as an independent, publicly-traded company. The transaction is intended to be tax-free for Xerox shareholders for federal income tax purposes. During third quarter 2016, the CFO for Conduent was announced, and several amendments to the Form 10 registration statement for Conduent were filed with the U.S. Securities and Exchange Commission (SEC), including one that provided additional information on its pro-forma capitalization and results and another that named the majority of its executive management and seven of nine of its directors. Also, Xerox's credit ratings remain investment grade following recent updates from the major rating agencies. Conduent is expected to be a high non-investment grade rated company following the separation. These ratings are in line with management's expectations. In addition, we released Conduent's brand identity and announced that its stock will trade on the New York Stock Exchange (NYSE) under the symbol "CNDT" while Xerox will continue to trade on the NYSE as "XRX". Xerox has begun the process to separate and is finalizing the transaction structure, which is predicated on a spin-off of the BPO business. To effect the separation, Xerox is currently undertaking a series of internal transactions, following which Conduent will hold, directly or through its subsidiaries, the BPO business. The separation will be completed by way of a pro rata distribution of Conduent shares held by Xerox to Xerox's shareholders. Our objective is to complete the separation by year-end 2016, subject to customary regulatory approvals, the effectiveness of a Form 10 registration statement with the SEC, tax considerations, securing any necessary financing and final approval of the Xerox Board of Directors. Until the separation is complete, we will continue to operate and report as a single company, and it will continue to be business as usual for our customers and employees. In conjunction with the separation, Xerox also began a three-year Strategic Transformation program targeting a cumulative $2.4 billion of savings across all segments. The program is inclusive of ongoing activities and $600 of incremental transformation initiatives. Refer to Note 9- Restructuring Programs for additional information.

Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for our fiscal year beginning January 1, 2018, with early adoption permitted for fiscal years beginning January 1, 2017. Subsequent to the issuance of ASU 2014-09, the FASB issued the following ASU’s which amend or provide additional guidance on topics addressed in ASU 2014-09. In March 2016, the FASB issued ASU 2016-08, Revenue Recognition - Principal versus Agent (reporting revenue gross versus net). In April 2016, the FASB issued ASU 2016-10, Revenue Recognition - Identifying Performance Obligations and Licenses. In May 2016, the FASB issued ASU 2016-12, Revenue Recognition - Narrow Scope Improvements and Practical Expedients. We will adopt this standard beginning January 1, 2018, and we will use the modified retrospective method. We continue to evaluate the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases. This update requires the recognition of leased assets and lease obligations by lessees for those leases currently classified as operating leases under existing lease guidance. Short term leases with a term of 12 months or less are not required to be recognized. The update also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. The accounting for lessors does not fundamentally change except for changes to conform and align guidance to the lessee guidance as well as to the new revenue recognition guidance in ASU 2014-09. This update is effective for our fiscal year beginning January 1, 2019. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements.

Cash Flows

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments. This update provides specific guidance on eight cash flow classification issues where current GAAP is either unclear or does not include specific guidance. This update is effective for our fiscal year beginning January 1, 2018. This update includes specific guidance which requires cash collected on beneficial interests received in a sale of receivables be classified as inflows from investing activities. Currently, those collections are reported in operating cash flows. We reported $211 and $305 of collections on beneficial interests as operating cash inflows on the Statement of Cash Flows for the nine months ended September 30, 2016 and for the year ended December 31, 2015, respectively. The other seven issues noted in this update are not expected to have a material impact on our financial condition, results of operations or cash flows.

Stock Compensation

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation, Improvements to Employee Share-Based payment Accounting (Topic 718). This update includes provisions to simplify certain aspects related to the accounting for share-based awards and the related financial statement presentation. The update also requires that excess tax benefits and deficiencies be recorded in the income statement when the awards vest or are settled as compared to equity as allowed under certain conditions by current US GAAP. This change is required to be adopted prospectively in the period of adoption. In addition, the ASU modifies the classification of certain share-based payment activities within the statements of cash flows and these changes are required to be applied retrospectively to all periods presented. ASU 2016-09 is effective for our fiscal year beginning January 1, 2017. The adoption of ASU No. 2016-09 for the most part is not expected to have a material impact on our financial condition, results of operations or cash flows. However, the update may add volatility to our income tax expense in future periods depending upon, among other things, the level of tax expense and the price of the Company's common stock at the date of vesting for share-based awards.

Income Taxes

In October 2016, the FASB issued ASU 2016-16, Income Taxes - Intra-Entity Transfers of Assets Other than Inventory. This update requires recognition of the income-tax consequences of an intra-entity transfer of assets other than inventory when the transfer occurs. Under current GAAP, recognition of the income tax consequences for asset transfers other than inventory could not be recognized until the asset was sold to a third party. This update is effective for our fiscal year beginning January 1, 2018 and should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently evaluating the impact of the adoption of ASU 2016-16 on our consolidated financial statements.

Financial Instruments - Credit Losses

In June 2016, the FASB issued ASU 2016-13 Financial Instruments Credit Losses - Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets. The update impacts financial assets and net investment in leases that are not accounted for at fair value through net income. This update is effective for our fiscal year beginning January 1, 2020, with early adoption permitted as of January 1, 2019. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

Equity Method Accounting

In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting. This update eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive income/(loss) ("AOCI") will be recognized through earnings. This update is effective for our fiscal year beginning January 1, 2017, with early adoption permitted. The adoption of this update is not expected to have a material impact on our financial condition, results of operations or cash flows.

Interest

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, which indicated that the SEC staff would not object to an entity deferring and presenting debt issuance costs associated with a line-of-credit arrangement as an asset and subsequently amortizing those costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. All of our debt issuance costs were reported as deferred charges in Other long-term assets and were $32 at December 31, 2015, $4 of which is related to our credit agreement. Upon adoption of this update effective January 1, 2016, we reclassified $28 of debt issuance costs to long-term debt. Prior periods were retroactively revised. The costs associated with our credit agreement will continue to be reported as a deferred charge in Other long-term assets. The adoption of this standard is not expected to have any effect on our financial condition, results of operations or cash flows.

Other Updates

In 2016 and 2015, the FASB also issued the following Accounting Standards Updates which are not expected to have a material impact on our financial condition, results of operations or cash flows when adopted in future periods. Those updates are as follows:


•	Financial Instruments - Classification and Measurement: ASU 2016-01, Financial Instruments - Recognition and Measurement of Financial Instruments and Financial Liabilities. This update is effective for our fiscal year beginning January 1, 2018.


•	Derivatives and Hedging: ASU 2016-06, Contingent Put and Call Options in Debt Instruments, which is effective for our fiscal year beginning January 1, 2017 with early adoption permitted.


•	Derivatives and Hedging: ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships, which is effective for our fiscal year beginning January 1, 2017 with early adoption permitted.


•	Inventory: ASU 2015-11, Simplifying the Subsequent Measurement of Inventory, which is effective for our fiscal year beginning January 1, 2017.


•	Disclosures of Going Concern Uncertainties: ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is effective for our fiscal year ending December 31, 2016.


•	Stock Compensation: ASU 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period, which was effective for our fiscal year beginning January 1, 2016.

The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6507316

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Direct Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=66092750

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=64853466&loc=d3e22583-107794

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Indirect Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6515603

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64853466&loc=d3e22580-107794

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.10-01.(b)(6))
-URI http://asc.fasb.org/extlink&oid=27015980&loc=d3e46468-122699

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Accounting Change
-URI http://asc.fasb.org/extlink&oid=6503790

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=64853466&loc=d3e22499-107794

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Retrospective Application
-URI http://asc.fasb.org/extlink&oid=6523989

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=68064558&loc=d3e765-108305

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=68064558&loc=d3e725-108305

Segment Reporting

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

Our reportable segments are aligned with how we manage the business and view the markets we serve. We report our financial performance based on the following two primary reportable segments – Services and Document Technology. Our Services segment operations involve delivery of business process and document outsourcing services for a broad range of customers from small businesses to large global enterprises. Our Document Technology segment includes the sale and support of a broad range of document systems from entry level to high-end.

In the first quarter of 2016, we revised our segment reporting to reflect the following changes:


•	The transfer of the Education/Student Loan business from the Services segment to Other as a result of the expected continued run-off of this business. This business does not meet the threshold for separate segment reporting.


•	The exclusion of the non-service elements of our defined-benefit pension and retiree-health plan costs from Segment profit.

Prior year amounts were accordingly revised to reflect these changes.

The Services segment is comprised of two outsourcing service offerings:


•	Business Process Outsourcing (BPO)


•	Document Outsourcing (which includes Managed Print Services) (DO)

Business process outsourcing services include service arrangements where we manage a customer’s business activity or process. We provide multi-industry offerings such as customer care, transaction processing, finance and accounting, and human resources, as well as industry-focused offerings in areas such as healthcare, transportation, financial services, retail and telecommunications. Document outsourcing services include service arrangements that allow customers to streamline, simplify and digitize their document-intensive business processes through automation and deployment of software applications and tools and the management of their printing needs. Document outsourcing also includes revenues from our partner print services offerings.

Our Document Technology segment includes the sale of document systems and supplies, provision of technical service and financing of products. Our products groupings range from:


•	“Entry,” which includes A4 devices and desktop printers; to


•	“Mid-range,” which includes A3 devices that generally serve workgroup environments in mid to large enterprises and includes products that fall into the following market categories: Color 41+ ppm priced at less than $100K and Light Production 91+ ppm priced at less than $100K; to


•	“High-end,” which includes production printing and publishing systems that generally serve the graphic communications marketplace and large enterprises.

Customers range from small and mid-sized businesses to large enterprises. Customers also include graphic communication enterprises as well as channel partners including distributors and resellers. Segment revenues reflect the sale of document systems and supplies, technical services and product financing.

Other includes several units, none of which meet the thresholds for separate segment reporting. This group includes paper sales in our developing market countries, Wide Format Systems, licensing revenues, Global Imaging Systems (GIS) network integration solutions, electronic presentation systems, Education/Student Loan business and non-allocated corporate items including non-financing interest and other items included in Other expenses, net.

Operating segment revenues and profitability were as follows:



	Three Months Ended September 30,					Nine Months Ended September 30,
	Segment Revenue		Segment Profit (Loss)			Segment Revenue		Segment Profit(Loss)
2016
Services	$	2,398	$	226		$	7,350	$	652
Document Technology	1,626		213			5,017		601
Other	188		(65		)	511		(211		)
Total	$	4,212	$	374		$	12,878	$	1,042
2015
Services ⁽¹⁾	$	2,367	$	(196	)	$	7,360	$	172
Document Technology	1,778		248			5,488		715
Other	188		(55		)	544		(164		)
Total	$	4,333	$	(3	)	$	13,392	$	723

_____________


(1)	Services segment results for the three and nine months ended September 30, 2015 include a charge of $389 related to our Health Enterprise platform implementations in California and Montana. $116 of the charge was recorded as a reduction to revenues and the remainder of $273 was recorded to Cost of outsourcing, maintenance and rentals.



	Three Months Ended September 30,						Nine Months Ended September 30,
Reconciliation to Pre-tax Income	2016			2015			2016			2015
Segment Profit (Loss)	$	374		$	(3	)	$	1,042		$	723
Reconciling items:
Restructuring and related costs	(32		)	(20		)	(229		)	(191		)
Restructuring charges of Fuji Xerox	(2		)	(2		)	(3		)	(4		)
Business transformation costs⁽¹⁾	(2		)	(2		)	(3		)	(9		)
Amortization of intangible assets	(77		)	(77		)	(244		)	(233		)
Non-service retirement-related costs⁽²⁾	(34		)	(30		)	(112		)	(82		)
Equity in net income of unconsolidated affiliates	(39		)	(40		)	(98		)	(103		)
Separation costs⁽³⁾	(39		)	—			(75		)	—
Other	1			1			1			1
Pre-tax Income (Loss)	$	150		$	(173	)	$	279		$	102

__________________________


(1)	Business transformation costs represent incremental costs incurred directly in support of our business transformation and restructuring initiatives such as compensation costs for overlapping staff, consulting costs and training costs.


(2)	Represents the non-service elements of our defined-benefit pension and retiree-health plan costs. Refer to Note 13 - Employee Benefit Plans for details regarding these elements.


(3)	Separation costs are expenses incurred in connection with Xerox's planned separation into two independent, publicly-traded companies. These costs are primarily for third-party investment banking, accounting, legal, consulting and other similar types of services. Refer to Note 1 - Basis of Presentation for additional information regarding Xerox's planned separation.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Discontinued Operations and Disposal Groups [Abstract]

Divestitures

9 Months Ended

Sep. 30, 2016

Divestitures

Information Technology Outsourcing (ITO)

In 2014, we announced an agreement to sell our ITO business to Atos SE (Atos). As a result of this agreement, we reported the ITO business as held for sale and a discontinued operation up through its date of sale, which was completed on June 30, 2015.

In February 2016, we reached an agreement with Atos on the final adjustments to the closing balance of net assets sold as well as the settlement of certain indemnifications and recorded an additional pre-tax loss on the disposal in 2015 of $24 ($14 after-tax). This additional loss was recorded in the 2015 financial statements because the agreement with Atos was reached before the financial statements had been issued, accordingly no adjustment was required in 2016. In the first quarter 2016, we paid Atos approximately $52, representing a $28 adjustment to the final sales price as a result of this agreement and a payment of $24 due from closing. The payment is reflected in Investing cash flows as an adjustment of the sales proceeds.

Other Discontinued Operations

There were no Discontinued Operations as of September 30, 2016. Summarized financial information for our Discontinued Operations in prior periods is as follows:



	Three Months Ended September 30, 2015								Nine Months Ended September 30, 2015
	ITO			Other		Total			ITO			Other		Total
Revenues	$	—		$	—	$	—		$	619		$	—	$	619
Income from operations ⁽¹⁾	—			—		—			104			—		104
Loss on disposal	(5		)	—		(5		)	(77		)	—		(77		)
Net (loss) income before income taxes	$	(5	)	$	—	$	(5	)	$	27		$	—	$	27
Income tax benefit (expense)	2			—		2			(91		)	—		(91		)
Loss from discontinued operations, net of tax	$	(3	)	$	—	$	(3	)	$	(64	)	$	—	$	(64	)

_______________


(1)	ITO Income from operations for the nine months ended September 30, 2015, excludes approximately $80 of depreciation and amortization expenses (including $14 of intangible amortization) since the business was held for sale.

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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Accounts Receivable, Net

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Accounts Receivable, Net

Accounts receivable, net were as follows:



	September 30, 2016			December 31, 2015
Amounts billed or billable	$	2,180		$	2,110
Unbilled amounts	360			289
Allowance for doubtful accounts	(74		)	(80		)
Accounts Receivable, Net	$	2,466		$	2,319

Unbilled receivables include receivables associated with percentage-of-completion accounting and other earned revenues not currently billable due to contractual provisions. Amounts to be invoiced in the subsequent month for current services provided are included in amounts billable, and at September 30, 2016 and December 31, 2015 were approximately $843 and $849, respectively.

We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. The allowance for uncollectible accounts receivable is determined principally on the basis of past collection experience, as well as consideration of current economic conditions and changes in our customer collection trends.

Accounts Receivable Sales Arrangements

Accounts receivable sales arrangements are utilized in the normal course of business as part of our cash and liquidity management. We have facilities in the U.S., Canada and several countries in Europe that enable us to sell to third parties certain accounts receivable without recourse. The accounts receivable sold are generally short-term trade receivables with payment due dates of less than 60 days.

All of our arrangements involve the sale of our entire interest in groups of accounts receivable for cash. In most instances, a portion of the sales proceeds is held back by the purchaser and payment is deferred until collection of the related receivables sold. Such holdbacks are not considered legal securities nor are they certificated. We report collections on such receivables as operating cash flows in the Condensed Consolidated Statements of Cash Flows because such receivables are the result of an operating activity and the associated interest rate risk is de minimis due to its short-term nature. Our risk of loss following the sales of accounts receivable is limited to the outstanding deferred purchase price receivable. These receivables are included in Other current assets in the accompanying Condensed Consolidated Balance Sheets and were $55 and $61 at September 30, 2016 and December 31, 2015, respectively.

Under most of the arrangements, we continue to service the sold accounts receivable. When applicable, a servicing liability is recorded for the estimated fair value of the servicing. The amounts associated with the servicing liability were not material.

Of the accounts receivable sold and derecognized from our balance sheet, $540 and $660 remained uncollected as of September 30, 2016 and December 31, 2015, respectively.

Accounts receivable sales were as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Accounts receivable sales	$	591		$	551		$	1,919		$	1,739
Deferred proceeds	54			67			184			186
Loss on sales of accounts receivable	4			3			12			9
Estimated decrease to operating cash flows⁽¹⁾	(60		)	(31		)	(114		)	(45		)

__________________________


(1)	Represents the difference between current and prior period receivable sales adjusted for the effects of: (i) the deferred proceeds, (ii) collections prior to the end of the quarter and, (iii) currency.

Finance Receivables, Net

Sale of Finance Receivables

In 2013 and 2012, we transferred our entire interest in certain groups of lease finance receivables to third-party entities for cash proceeds and beneficial interests. The transfers were accounted for as sales with derecognition of the associated lease receivables. There have been no transfers of finance receivables since the year ended December 31, 2013. We continue to service the sold receivables and record servicing fee income over the expected life of the associated receivables.

The following is a summary of our prior sales activity.



	Year Ended December 31,
	2013		2012
Net carrying value (NCV) sold	$	676	$	682
Allowance included in NCV	17		18
Cash proceeds received	635		630
Beneficial interests received	86		101

The principal value of finance receivables derecognized from our balance sheet was $107 and $238 (sales value of approximately $115 and $256) at September 30, 2016 and December 31, 2015, respectively.

The lease portfolios transferred and sold were from our Document Technology segment. The ultimate purchaser has no recourse to our other assets for the failure of customers to pay principal and interest when due beyond our beneficial interests, which were $26 and $38 at September 30, 2016 and December 31, 2015, respectively, and are included in Other current assets and Other long-term assets in the accompanying Condensed Consolidated Balance Sheets. Beneficial interests of $16 and $30 at September 30, 2016 and December 31, 2015, respectively, are held by bankruptcy-remote subsidiaries and therefore are not available to satisfy any of our creditor obligations. We report collections on the beneficial interests as operating cash flows in the Condensed Consolidated Statements of Cash Flows because such beneficial interests are the result of an operating activity, and the associated interest rate risk is de minimis considering their weighted average lives of less than 2 years.

The net impact from the sales of finance receivables on operating cash flows is summarized below:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Impact from prior sales of finance receivables⁽¹⁾	$	(41	)	$	(79	)	$	(151	)	$	(273	)
Collections on beneficial interest	6			12			24			45
Estimated decrease to operating cash flows	$	(35	)	$	(67	)	$	(127	)	$	(228	)

____________________________

(1) Represents cash that would have been collected had we not sold finance receivables.

Finance Receivables – Allowance for Credit Losses and Credit Quality

Finance receivables include sales-type leases, direct financing leases and installment loans. Our finance receivable portfolios are primarily in the U.S., Canada and Europe. We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis. Our policy and methodology used to establish our allowance for doubtful accounts has been consistently applied over all periods presented.

The following table is a rollforward of the allowance for doubtful finance receivables as well as the related investment in finance receivables:



Allowance for Credit Losses:	United States			Canada			Europe			Other⁽²⁾			Total
Balance at December 31, 2015⁽¹⁾	$	54		$	17		$	45		$	2		$	118
Provision	4			1			5			—			10
Charge-offs	(2		)	(2		)	(2		)	—			(6		)
Recoveries and other⁽³⁾	1			2			1			—			4
Balance at March 31, 2016	$	57		$	18		$	49		$	2		$	126
Provision	—			1			7			—			8
Charge-offs	(3		)	(2		)	(3		)	—			(8		)
Recoveries and other⁽³⁾	—			1			(2		)	—			(1		)
Balance at June 30, 2016	$	54		$	18		$	51		$	2		$	125
Provision	3			1			5			—			9
Charge-offs	(1		)	(2		)	(3		)	—			(6		)
Recoveries and other⁽³⁾	1			—			—			—			1
Balance at September 30, 2016	$	57		$	17		$	53		$	2		$	129
Finance receivables as of September 30, 2016 collectively evaluated for impairment ⁽⁴⁾	$	2,139		$	377		$	1,382		$	66		$	3,964

Balance at December 31, 2014⁽¹⁾	$	51		$	20		$	58		$	2		$	131
Provision	4			1			5			1			11
Charge-offs	—			(3		)	(1		)	(1		)	(5		)
Recoveries and other⁽³⁾	—			—			(6		)	—			(6		)
Balance at March 31, 2015	$	55		$	18		$	56		$	2		$	131
Provision	3			1			6			—			10
Charge-offs	(3		)	(2		)	(5		)	—			(10		)
Recoveries and other⁽³⁾	(1		)	1			3			—			3
Balance at June 30, 2015	$	54		$	18		$	60		$	2		$	134
Provision	2			1			6			—			9
Charge-offs	—			(3		)	(1		)	—			(4		)
Recoveries and other⁽³⁾	—			—			(1		)	—			(1		)
Balance at September 30, 2015	$	56		$	16		$	64		$	2		$	138
Finance receivables as of September 30, 2015 collectively evaluated for impairment ^(1),(4)	$	2,142		$	366		$	1,562		$	67		$	4,137

__________________


(1)	In the first quarter 2016, as a result of an internal reorganization, a U.S. leasing unit previously classified in Other was reclassified to the U.S. Prior year amounts have been revised to conform to current year presentation.


(2)	Includes developing market countries and smaller units.


(3)	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.


(4)	Total Finance receivables exclude the allowance for credit losses of $129 and $138 at September 30, 2016 and 2015, respectively.

We evaluate our customers based on the following credit quality indicators:

•

Investment grade: This rating includes accounts with excellent to good business credit, asset quality and the capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. The rating generally equates to a Standard & Poors (S&P) rating of BBB- or better. Loss rates in this category are normally minimal at less than 1%.

•

Non-investment grade: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. This rating generally equates to a BB S&P rating. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain on such leases. Loss rates in this category are generally in the range of 2% to 4%.

•

Substandard: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from investment and non-investment grade status when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category are approximately 10%.

Credit quality indicators are updated at least annually and the credit quality of any given customer can change during the life of the portfolio. Details about our finance receivables portfolio based on industry and credit quality indicators are as follows:



	September 30, 2016								December 31, 2015⁽⁴⁾
	Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables		Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables
Finance and other services	$	178	$	336	$	94	$	608	$	195	$	285	$	91	$	571
Government and education	553		57		6		616		575		48		7		630
Graphic arts	133		117		98		348		145		92		127		364
Industrial	83		73		25		181		89		62		22		173
Healthcare	77		49		16		142		90		46		19		155
Other	90		102		52		244		121		107		53		281
Total United States	1,114		734		291		2,139		1,215		640		319		2,174
Finance and other services	57		41		10		108		55		35		9		99
Government and education	55		6		1		62		59		7		2		68
Graphic arts	42		38		22		102		45		35		21		101
Industrial	23		13		3		39		23		12		3		38
Other	35		25		6		66		33		23		3		59
Total Canada	212		123		42		377		215		112		38		365
France	192		237		60		489		203		207		101		511
U.K./Ireland	190		73		1		264		235		91		3		329
Central⁽¹⁾	199		162		24		385		206		186		25		417
Southern⁽²⁾	42		134		14		190		36		138		17		191
Nordics⁽³⁾	28		25		1		54		24		35		2		61
Total Europe	651		631		100		1,382		704		657		148		1,509
Other	41		22		3		66		41		16		1		58
Total	$	2,018	$	1,510	$	436	$	3,964	$	2,175	$	1,425	$	506	$	4,106

_____________________________


(1)	Switzerland, Germany, Austria, Belgium and Holland.


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.


(4)	In the first quarter 2016, as a result of an internal reorganization, a U.S. leasing unit previously classified in Other was reclassified to the U.S. Prior year amounts have been reclassified to conform to current year presentation.

The aging of our billed finance receivables is based upon the number of days an invoice is past due and is as follows:



	September 30, 2016
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Finance and other services	$	12	$	2	$	2	$	16	$	592	$	608	$	11
Government and education	17		1		3		21		595		616		23
Graphic arts	14		1		—		15		333		348		5
Industrial	4		1		1		6		175		181		5
Healthcare	3		1		1		5		137		142		5
Other	10		1		1		12		232		244		6
Total United States	60		7		8		75		2,064		2,139		55
Canada	3		—		—		3		374		377		9
France	4		—		—		4		485		489		28
U.K./Ireland	3		1		—		4		260		264		1
Central⁽¹⁾	2		1		2		5		380		385		12
Southern⁽²⁾	7		2		2		11		179		190		8
Nordics⁽³⁾	1		—		—		1		53		54		3
Total Europe	17		4		4		25		1,357		1,382		52
Other	3		—		—		3		63		66		—
Total	$	83	$	11	$	12	$	106	$	3,858	$	3,964	$	116

	December 31, 2015⁽⁴⁾
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Finance and other services	$	10	$	2	$	2	$	14	$	557	$	571	$	14
Government and education	12		1		4		17		613		630		37
Graphic arts	12		2		1		15		349		364		8
Industrial	5		1		1		7		166		173		7
Healthcare	4		1		1		6		149		155		9
Other	14		2		2		18		263		281		7
Total United States	57		9		11		77		2,097		2,174		82
Canada	3		—		—		3		362		365		9
France	—		—		—		—		511		511		25
U.K./Ireland	1		—		—		1		328		329		1
Central⁽¹⁾	3		1		1		5		412		417		7
Southern⁽²⁾	8		2		3		13		178		191		10
Nordics⁽³⁾	1		—		—		1		60		61		4
Total Europe	13		3		4		20		1,489		1,509		47
Other	1		1		—		2		56		58		—
Total	$	74	$	13	$	15	$	102	$	4,004	$	4,106	$	138

_____________________________


(1)	Switzerland, Germany, Austria, Belgium and Holland.


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.


(4)	In the first quarter 2016, as a result of an internal reorganization, a U.S. leasing unit previously classified in Other was reclassified to the U.S. Prior year amounts have been reclassified to conform to current year presentation.

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

Financing Receivable, Net [Abstract]

Finance Receivables, Net

9 Months Ended

Sep. 30, 2016

Finance Receivables, Net

Accounts Receivable, Net

Accounts receivable, net were as follows:



	September 30, 2016			December 31, 2015
Amounts billed or billable	$	2,180		$	2,110
Unbilled amounts	360			289
Allowance for doubtful accounts	(74		)	(80		)
Accounts Receivable, Net	$	2,466		$	2,319

Accounts Receivable Sales Arrangements

Of the accounts receivable sold and derecognized from our balance sheet, $540 and $660 remained uncollected as of September 30, 2016 and December 31, 2015, respectively.

Accounts receivable sales were as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Accounts receivable sales	$	591		$	551		$	1,919		$	1,739
Deferred proceeds	54			67			184			186
Loss on sales of accounts receivable	4			3			12			9
Estimated decrease to operating cash flows⁽¹⁾	(60		)	(31		)	(114		)	(45		)

__________________________


(1)	Represents the difference between current and prior period receivable sales adjusted for the effects of: (i) the deferred proceeds, (ii) collections prior to the end of the quarter and, (iii) currency.

Finance Receivables, Net

Sale of Finance Receivables

The following is a summary of our prior sales activity.



	Year Ended December 31,
	2013		2012
Net carrying value (NCV) sold	$	676	$	682
Allowance included in NCV	17		18
Cash proceeds received	635		630
Beneficial interests received	86		101

The net impact from the sales of finance receivables on operating cash flows is summarized below:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Impact from prior sales of finance receivables⁽¹⁾	$	(41	)	$	(79	)	$	(151	)	$	(273	)
Collections on beneficial interest	6			12			24			45
Estimated decrease to operating cash flows	$	(35	)	$	(67	)	$	(127	)	$	(228	)

____________________________

(1) Represents cash that would have been collected had we not sold finance receivables.

Finance Receivables – Allowance for Credit Losses and Credit Quality

The following table is a rollforward of the allowance for doubtful finance receivables as well as the related investment in finance receivables:



Allowance for Credit Losses:	United States			Canada			Europe			Other⁽²⁾			Total
Balance at December 31, 2015⁽¹⁾	$	54		$	17		$	45		$	2		$	118
Provision	4			1			5			—			10
Charge-offs	(2		)	(2		)	(2		)	—			(6		)
Recoveries and other⁽³⁾	1			2			1			—			4
Balance at March 31, 2016	$	57		$	18		$	49		$	2		$	126
Provision	—			1			7			—			8
Charge-offs	(3		)	(2		)	(3		)	—			(8		)
Recoveries and other⁽³⁾	—			1			(2		)	—			(1		)
Balance at June 30, 2016	$	54		$	18		$	51		$	2		$	125
Provision	3			1			5			—			9
Charge-offs	(1		)	(2		)	(3		)	—			(6		)
Recoveries and other⁽³⁾	1			—			—			—			1
Balance at September 30, 2016	$	57		$	17		$	53		$	2		$	129
Finance receivables as of September 30, 2016 collectively evaluated for impairment ⁽⁴⁾	$	2,139		$	377		$	1,382		$	66		$	3,964

Balance at December 31, 2014⁽¹⁾	$	51		$	20		$	58		$	2		$	131
Provision	4			1			5			1			11
Charge-offs	—			(3		)	(1		)	(1		)	(5		)
Recoveries and other⁽³⁾	—			—			(6		)	—			(6		)
Balance at March 31, 2015	$	55		$	18		$	56		$	2		$	131
Provision	3			1			6			—			10
Charge-offs	(3		)	(2		)	(5		)	—			(10		)
Recoveries and other⁽³⁾	(1		)	1			3			—			3
Balance at June 30, 2015	$	54		$	18		$	60		$	2		$	134
Provision	2			1			6			—			9
Charge-offs	—			(3		)	(1		)	—			(4		)
Recoveries and other⁽³⁾	—			—			(1		)	—			(1		)
Balance at September 30, 2015	$	56		$	16		$	64		$	2		$	138
Finance receivables as of September 30, 2015 collectively evaluated for impairment ^(1),(4)	$	2,142		$	366		$	1,562		$	67		$	4,137

__________________


(1)	In the first quarter 2016, as a result of an internal reorganization, a U.S. leasing unit previously classified in Other was reclassified to the U.S. Prior year amounts have been revised to conform to current year presentation.


(2)	Includes developing market countries and smaller units.


(3)	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.


(4)	Total Finance receivables exclude the allowance for credit losses of $129 and $138 at September 30, 2016 and 2015, respectively.

We evaluate our customers based on the following credit quality indicators:

•



	September 30, 2016								December 31, 2015⁽⁴⁾
	Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables		Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables
Finance and other services	$	178	$	336	$	94	$	608	$	195	$	285	$	91	$	571
Government and education	553		57		6		616		575		48		7		630
Graphic arts	133		117		98		348		145		92		127		364
Industrial	83		73		25		181		89		62		22		173
Healthcare	77		49		16		142		90		46		19		155
Other	90		102		52		244		121		107		53		281
Total United States	1,114		734		291		2,139		1,215		640		319		2,174
Finance and other services	57		41		10		108		55		35		9		99
Government and education	55		6		1		62		59		7		2		68
Graphic arts	42		38		22		102		45		35		21		101
Industrial	23		13		3		39		23		12		3		38
Other	35		25		6		66		33		23		3		59
Total Canada	212		123		42		377		215		112		38		365
France	192		237		60		489		203		207		101		511
U.K./Ireland	190		73		1		264		235		91		3		329
Central⁽¹⁾	199		162		24		385		206		186		25		417
Southern⁽²⁾	42		134		14		190		36		138		17		191
Nordics⁽³⁾	28		25		1		54		24		35		2		61
Total Europe	651		631		100		1,382		704		657		148		1,509
Other	41		22		3		66		41		16		1		58
Total	$	2,018	$	1,510	$	436	$	3,964	$	2,175	$	1,425	$	506	$	4,106

_____________________________


(1)	Switzerland, Germany, Austria, Belgium and Holland.


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.


(4)	In the first quarter 2016, as a result of an internal reorganization, a U.S. leasing unit previously classified in Other was reclassified to the U.S. Prior year amounts have been reclassified to conform to current year presentation.

The aging of our billed finance receivables is based upon the number of days an invoice is past due and is as follows:



	September 30, 2016
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Finance and other services	$	12	$	2	$	2	$	16	$	592	$	608	$	11
Government and education	17		1		3		21		595		616		23
Graphic arts	14		1		—		15		333		348		5
Industrial	4		1		1		6		175		181		5
Healthcare	3		1		1		5		137		142		5
Other	10		1		1		12		232		244		6
Total United States	60		7		8		75		2,064		2,139		55
Canada	3		—		—		3		374		377		9
France	4		—		—		4		485		489		28
U.K./Ireland	3		1		—		4		260		264		1
Central⁽¹⁾	2		1		2		5		380		385		12
Southern⁽²⁾	7		2		2		11		179		190		8
Nordics⁽³⁾	1		—		—		1		53		54		3
Total Europe	17		4		4		25		1,357		1,382		52
Other	3		—		—		3		63		66		—
Total	$	83	$	11	$	12	$	106	$	3,858	$	3,964	$	116

	December 31, 2015⁽⁴⁾
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Finance and other services	$	10	$	2	$	2	$	14	$	557	$	571	$	14
Government and education	12		1		4		17		613		630		37
Graphic arts	12		2		1		15		349		364		8
Industrial	5		1		1		7		166		173		7
Healthcare	4		1		1		6		149		155		9
Other	14		2		2		18		263		281		7
Total United States	57		9		11		77		2,097		2,174		82
Canada	3		—		—		3		362		365		9
France	—		—		—		—		511		511		25
U.K./Ireland	1		—		—		1		328		329		1
Central⁽¹⁾	3		1		1		5		412		417		7
Southern⁽²⁾	8		2		3		13		178		191		10
Nordics⁽³⁾	1		—		—		1		60		61		4
Total Europe	13		3		4		20		1,489		1,509		47
Other	1		1		—		2		56		58		—
Total	$	74	$	13	$	15	$	102	$	4,004	$	4,106	$	138

_____________________________


(1)	Switzerland, Germany, Austria, Belgium and Holland.


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.


(4)	In the first quarter 2016, as a result of an internal reorganization, a U.S. leasing unit previously classified in Other was reclassified to the U.S. Prior year amounts have been reclassified to conform to current year presentation.

Equity Method Investments and Joint Ventures [Abstract]

Inventories

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Inventories

The following is a summary of Inventories by major category:



	September 30, 2016		December 31, 2015
Finished goods	$	859	$	792
Work-in-process	58		51
Raw materials	102		99
Total Inventories	$	1,019	$	942

Investment in Affiliates, at Equity

9 Months Ended

Sep. 30, 2016

Investment in Affiliates, at Equity

Our equity in net income of unconsolidated affiliates was as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Fuji Xerox	$	35	$	34	$	87	$	90
Other investments	4		6		11		13
Total Equity in Net Income of Unconsolidated Affiliates	$	39	$	40	$	98	$	103

Fuji Xerox

Equity in net income of Fuji Xerox is affected by certain adjustments required to reflect the deferral of profit associated with intercompany sales. These adjustments may result in recorded equity income that is different from that implied by our 25% ownership interest.

Condensed financial data of Fuji Xerox was as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Summary of Operations:
Revenues	$	2,695	$	2,518	$	7,823	$	7,638
Costs and expenses	2,492		2,333		7,285		7,064
Income before income taxes	203		185		538		574
Income tax expense	54		57		163		186
Net Income	149		128		375		388
Less: Net income – noncontrolling interests	2		1		5		5
Net Income – Fuji Xerox	$	147	$	127	$	370	$	383
Weighted Average Exchange Rate⁽¹⁾	102.41		122.11		108.45		120.88

_____________________________


(1)	Represents Yen/U.S. Dollar exchange rate used to translate.

Restructuring Programs

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring Programs

During the nine months ended September 30, 2016, we recorded net restructuring and asset impairment charges of $199, which included approximately $218 of severance costs related to headcount reductions of approximately 5,700 employees worldwide, $4 of lease cancellation costs and $2 of asset impairments. These costs were offset by $20 of net reversals, primarily resulting from changes in estimated reserves from prior period initiatives, as well as a gain of $5 from the sale of real estate impaired in prior periods.

We also recorded $30 of costs during the nine months ended September 30, 2016, primarily related to professional support services associated with the implementation of the strategic transformation program.

Information related to restructuring program activity during the nine months ended September 30, 2016 is outlined below:



	Severance and Related Costs			Lease Cancellation and Other Costs			Asset Impairments⁽²⁾			Total
Balance at December 31, 2015	$	22		$	2		$	—		$	24
Provision	218			4			2			224
Reversals	(20		)	—			(5		)	(25		)
Net Current Period Charges⁽¹⁾	198			4			(3		)	199
Charges against reserve and currency	(118		)	(5		)	3			(120		)
Balance at September 30, 2016	$	102		$	1		$	—		$	103

_____________________________


(1)	Represents net amount recognized within the Condensed Consolidated Statements of Income for the period shown for restructuring and asset impairments charges.


(2)	Charges associated with asset impairments represent the write-down of the related assets to their new cost basis and are recorded concurrently with the recognition of the provision.

Reconciliation to the Condensed Consolidated Statements of Cash Flows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Charges against reserve	$	(54	)	$	(30	)	$	(120	)	$	(242	)
Asset impairments	—			7			2			153
Effects of foreign currency and other non-cash items	(1		)	3			(2		)	8
Restructuring Cash Payments	$	(55	)	$	(20	)	$	(120	)	$	(81	)

The following table summarizes the total amount of costs incurred in connection with these restructuring programs by segment:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016			2015
Services ⁽¹⁾	$	3	$	11	$	65		$	165
Document Technology	10		1		138			18
Other	—		8		(4		)	8
Total Net Restructuring Charges	$	13	$	20	$	199		$	191

_____________________________


(1)	The nine months ended September 30, 2015 includes $146 of software asset impairment charges.

Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Debt

Term Loan Facility

On March 4, 2016, Xerox Corporation entered into a $1.0 billion senior unsecured term facility. The facility was fully drawn by April 1, 2016 and must be repaid on the earlier of 364 days or upon receipt of financing related to the separation of the Company into two independent publicly traded companies. Refer to Note 1- Basis of Presentation for information regarding the planned Company separation. Borrowings under the facility currently bear interest at a rate of LIBOR plus 1.50% and current interest rates vary between 2.02% and 2.15%.

The proceeds of the facility were used to repay maturing debt of $950 ($700 of 6.40% Senior Notes on March 15, 2016 and $250 of 7.20% Notes on April 1, 2016).

Interest Expense and Income

Interest expense and interest income were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Interest expense⁽¹⁾	$	81	$	88	$	250	$	265
Interest income⁽²⁾	86		87		255		268

____________


(1)	Includes Equipment financing interest as well as non-financing interest expense that is included in Other expenses, net in the Condensed Consolidated Statements of Income.


(2)	Includes Finance income as well as other interest income that is included in Other expenses, net in the Condensed Consolidated Statements of Income.

Financial Instruments

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Interest Rate Risk Management

We use interest rate swap agreements to manage our interest rate exposure and to achieve a desired proportion of variable and fixed rate debt. These derivatives may be designated as fair value hedges or cash flow hedges depending on the nature of the risk being hedged.

Fair Value Hedges

As of September 30, 2016, pay variable/receive fixed interest rate swaps with notional amounts of $300 and net asset fair value of $15 were designated and accounted for as fair value hedges. The swaps were structured to hedge the fair value of related debt by converting them from fixed rate instruments to variable rate instruments.

The following is a summary of our fair value hedges at September 30, 2016:



Debt Instrument	Year First Designated	Notional Amount		Net Fair Value		Weighted Average Interest Rate Paid		Interest Rate Received		Basis	Maturity
Senior Note 2021	2014	$	300	$	15	2.56	%	4.5	%	Libor	2021

Foreign Exchange Risk Management

We are a global company that is 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 September 30, 2016 and December 31, 2015, we had outstanding forward exchange and purchased option contracts with gross notional values of $2,473 and $3,212 respectively, with terms of less than 12 months. The associated currency exposures being hedged at September 30, 2016 were consistent with year-end currency exposures, and 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 expenses. The net asset (liability) fair value of these contracts were $22 and $(1) as of September 30, 2016 and December 31, 2015, 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	September 30, 2016			December 31, 2015
Derivatives Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	24		$	4
	Other current liabilities	(2		)	(4		)
Foreign currency options	Other current liabilities	—			(1		)
Interest rate swaps	Other long-term assets	15			7
	Net Designated Derivative Asset	$	37		$	6

Derivatives NOT Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	62		$	51
	Other current liabilities	(6		)	(8		)
	Net Undesignated Derivative Asset	$	56		$	43

Summary of Derivatives	Total Derivative Assets	$	101		$	62
	Total Derivative Liabilities	(8		)	(13		)
	Net Derivative Asset	$	93		$	49

Summary of Derivative Instruments Gains (Losses)

Derivative gains (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 September 30,						Nine Months Ended September 30,
Gain (Loss) on Derivative Instruments	2016			2015			2016			2015
Fair Value Hedges - Interest rate contracts
Derivative (loss) gain recognized in interest expense	$	(3	)	$	7		$	8		$	7
Hedged item gain (loss) recognized in interest expense	3			(7		)	(8		)	(7		)

Cash Flow Hedges - Foreign exchange forward contracts and options
Derivative gain recognized in OCI (effective portion)	$	4		$	5		$	61		$	12
Derivative gain (loss) reclassified from AOCI to income - Cost of sales (effective portion)	17			(11		)	24			(21		)

During the three and nine months ended September 30, 2016 and 2015, no amount of ineffectiveness was recorded in earnings for these designated cash flow hedges and all components of each derivative’s gain (loss) was included in the assessment of hedge effectiveness. In addition, no amount was recorded for an underlying exposure that did not occur or was not expected to occur.

At September 30, 2016, a net after-tax gain of $25 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 re-measurement of the underlying foreign currency-denominated asset or liability.

The following table provides a summary of gains (losses) on non-designated derivative instruments:



Derivatives NOT Designated as Hedging Instruments		Three Months Ended September 30,				Nine Months Ended September 30,
Derivatives NOT Designated as Hedging Instruments	Location of Derivative Gain (Loss)	2016		2015		2016		2015
Foreign exchange contracts – forwards	Other expense – Currency gains (loss), net	$	33	$	33	$	182	$	(2	)

Net currency gains and losses are included in Other expenses, net and 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 re-measurement of foreign currency-denominated assets and liabilities. For the three and nine months ended September 30, 2016, currency losses, net were $3 and $4, respectively. For the three and nine months ended September 30, 2015, currency losses, net were $3 and $4, respectively.

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624171-113959

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41620-113959

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624163-113959

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579240-113959

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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-Paragraph 4D
-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624177-113959

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

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.



	September 30, 2016		December 31, 2015
Assets:
Foreign exchange contracts - forwards	$	86	$	55
Interest rate swaps	15		7
Deferred compensation investments in cash surrender life insurance	97		92
Deferred compensation investments in mutual funds	35		33
Total	$	233	$	187
Liabilities:
Foreign exchange contracts - forwards	$	8	$	12
Foreign currency options	—		1
Deferred compensation plan liabilities	127		125
Total	$	135	$	138

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 Company-owned life insurance is reflected at cash surrender value. Fair value for our deferred compensation plan investments in mutual funds is based on quoted market prices for actively traded investments similar to those held by the plan. Fair value for deferred compensation plan liabilities is based on the fair value of investments corresponding to employees’ investment selections, based on quoted prices for similar assets in actively traded markets.

Summary of Other Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis

The estimated fair values of our other financial assets and liabilities not measured at fair value on a recurring basis were as follows:



	September 30, 2016				December 31, 2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	1,423	$	1,423	$	1,368	$	1,368
Accounts receivable, net	2,466		2,466		2,319		2,319
Short-term debt	2,033		2,047		985		976
Long-term debt	5,346		5,537		6,354		6,395

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 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.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

9 Months Ended

Sep. 30, 2016

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 September 30,
	Pension Benefits
	U.S. Plans						Non-U.S. Plans						Retiree Health
Components of Net Periodic Benefit Costs:	2016			2015			2016			2015			2016			2015
Service cost	$	1		$	1		$	7		$	8		$	1		$	2
Interest cost	33			38			50			53			9			8
Expected return on plan assets	(35		)	(38		)	(63		)	(73		)	—			—
Recognized net actuarial loss	8			5			16			19			—			—
Amortization of prior service credit	—			—			(1		)	—			(2		)	(1		)
Recognized settlement loss	16			16			—			—			—			—
Defined Benefit Plans	23			22			9			7			8			9
Defined contribution plans	16			15			8			8			n/a			n/a
Net Periodic Benefit Cost	39			37			17			15			8			9

Other changes in plan assets and benefit obligations recognized in Other Comprehensive Loss (Income):
Net actuarial loss (gain)⁽¹⁾	113			(40		)	—			—			—			—
Amortization of prior service credit	—			—			1			—			2			1
Amortization of net actuarial loss	(24		)	(21		)	(16		)	(19		)	—			—
Total Recognized in Other Comprehensive Loss (Income)⁽²⁾	89			(61		)	(15		)	(19		)	2			1
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Loss (Income)	$	128		$	(24	)	$	2		$	(4	)	$	10		$	10



	Nine Months Ended September 30,
	Pension Benefits
	U.S. Plans						Non-U.S. Plans						Retiree Health
Components of Net Periodic Benefit Costs:	2016			2015			2016			2015			2016			2015
Service cost	$	3		$	3		$	23		$	25		$	4		$	6
Interest cost	106			114			155			159			25			25
Expected return on plan assets	(111		)	(114		)	(196		)	(220		)	—			—
Recognized net actuarial loss	20			18			50			59			1			1
Amortization of prior service credit	(1		)	(1		)	(3		)	(2		)	(4		)	(16		)
Recognized settlement loss	62			61			—			—			—			—
Recognized curtailment gain	—			—			—			—			—			(22		)
Defined Benefit Plans	79			81			29			21			26			(6		)
Defined contribution plans	45			46			28			28			n/a			n/a
Net Periodic Benefit Cost	124			127			57			49			26			(6		)

Other changes in plan assets and benefit obligations recognized in Other Comprehensive Loss (Income):
Net actuarial loss (gain)⁽¹⁾	370			(92		)	—			(2		)	(34		)	(58		)
Amortization of prior service credit	1			1			3			2			4			16
Amortization of net actuarial loss	(82		)	(79		)	(50		)	(59		)	(1		)	(1		)
Curtailment gain - recognition of net prior service credit	—			—			—			—			—			22
Total Recognized in Other Comprehensive Loss (Income)⁽²⁾	289			(170		)	(47		)	(59		)	(31		)	(21		)
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Loss (Income)	$	413		$	(43	)	$	10		$	(10	)	$	(5	)	$	(27	)

_____________________________


(1)	The net actuarial loss (gain) for U.S. Plans primarily reflects (i) the remeasurement of our primary U.S. pension plans as a result of the payment of periodic settlements; and (ii) adjustments for the actuarial valuation results based on January 1st plan census data.


(2)	Amounts represent the pre-tax effect included within Other comprehensive loss. Refer to Note 15 - Other Comprehensive (Loss) Income 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.



	Nine Months Ended September 30,				Year Ended December 31,
	2016		2015		Estimated 2016⁽¹⁾		2015
U.S. Plans	$	20	$	40	$	25	$	177
Non-U.S. Plans	86		108		115		132
Total	$	106	$	148	$	140	$	309

Retiree Health	$	46	$	49	$	65	$	63

___________


(1)	These full year estimates are based on current expectations that we will make additional 2016 cash contributions of $34 ($5 U.S. and $29 Non-U.S) to our defined benefit pension plans and $19 to our retiree health benefit plans.

The 2016 expected pension plan contributions do not include any planned contributions for our domestic tax-qualified defined benefit plans because none are required to meet the minimum funding requirements. However, the desirability of making additional contributions will continue to be assessed, and we may voluntarily decide to contribute to these plans before the end of the year.

Plan Amendments

In June 2015, we amended our U.S. Retiree Health Plan to eliminate future benefit accruals for active salaried employees effective December 31, 2015. There was no change in benefits for union employees or existing retirees or employees that retired before December 31, 2015. As a result of this plan amendment, we recognized a pre-tax curtailment gain of $22 in the second quarter 2015. The gain represents the recognition of deferred gains from other prior-year amendments (“prior service credits”) as a result of the discontinuation of the future benefit or service accrual period for active salaried employees.

Shareholders' Equity

9 Months Ended

Sep. 30, 2016

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity



	Common Stock		Additional Paid-in Capital		Retained Earnings			AOCL⁽³⁾			Xerox Shareholders’ Equity			Non-controlling Interests			Total Equity
Balance at December 31, 2015	$	1,013	$	3,017	$	9,686		$	(4,642	)	$	9,074		$	43		$	9,117
Comprehensive income, net	—		—		370			10			380			7			387
Cash dividends declared - common⁽¹⁾	—		—		(237		)	—			(237		)	—			(237		)
Cash dividends declared - preferred⁽²⁾	—		—		(18		)	—			(18		)	—			(18		)
Stock option and incentive plans, net	1		54		—			—			55			—			55
Distributions to noncontrolling interests	—		—		—			—			—			(10		)	(10		)
Balance at September 30, 2016	$	1,014	$	3,071	$	9,801		$	(4,632	)	$	9,254		$	40		$	9,294



	Common Stock			Additional Paid-in Capital			Treasury Stock			Retained Earnings			AOCL⁽³⁾			Xerox Shareholders’ Equity			Non- controlling Interests			Total Equity
Balance at December 31, 2014	$	1,124		$	4,283		$	(105	)	$	9,535		$	(4,159	)	$	10,678		$	75		$	10,753
Comprehensive income (loss), net	—			—			—			203			(240		)	(37		)	12			(25		)
Cash dividends declared - common⁽¹⁾	—			—			—			(227		)	—			(227		)	—			(227		)
Cash dividends declared - preferred⁽²⁾	—			—			—			(18		)	—			(18		)	—			(18		)
Stock option and incentive plans, net	11			8			—			—			—			19			—			19
Payments to acquire treasury stock, including fees	—			—			(1,302		)	—			—			(1,302		)	—			(1,302		)
Cancellation of treasury stock	(57		)	(659		)	716			—			—			—			—			—
Distributions to noncontrolling interests	—			—			—			—			—			—			(43		)	(43		)
Balance at September 30, 2015	$	1,078		$	3,632		$	(691	)	$	9,493		$	(4,399	)	$	9,113		$	44		$	9,157

_____________________________


(1)	Cash dividends declared on common stock of $0.0775 per share in each quarter of 2016 and $0.07 per share in each quarter of 2015.


(2)	Cash dividends declared on preferred stock of $20.00 per share in each quarter of 2016 and 2015.


(3)	Refer to Note 15 - Other Comprehensive (Loss) Income for components of AOCL.

Treasury Stock

There were no repurchases of Xerox Common Stock pursuant to Board authorized share repurchase programs during the third quarter 2016 or for the nine months ended September 30, 2016.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Other Comprehensive Income (Loss) [Abstract]

Other Comprehensive (Loss) Income

9 Months Ended

Sep. 30, 2016

Other Comprehensive (Loss) Income

Other Comprehensive (Loss) Income is comprised of the following:



	Three Months Ended September 30,												Nine Months Ended September 30,
	2016						2015						2016						2015
	Pre-tax			Net of Tax			Pre-tax			Net of Tax			Pre-tax			Net of Tax			Pre-tax			Net of Tax
Translation Adjustments (Losses) Gains	$	(22	)	$	(22	)	$	(206	)	$	(206	)	$	96		$	92		$	(521	)	$	(521	)
Unrealized Gains (Losses):
Changes in fair value of cash flow hedges - gains	4			3			5			4			61			42			12			11
Changes in cash flow hedges reclassed to earnings⁽¹⁾	(17		)	(12		)	11			5			(24		)	(17		)	21			9
Other losses	—			—			(2		)	(1		)	(1		)	(1		)	(2		)	(2		)
Net Unrealized (Losses) Gains	(13		)	(9		)	14			8			36			24			31			18

Defined Benefit Plans (Losses) Gains:
Net actuarial (losses) gains	(113		)	(69		)	40			25			(336		)	(207		)	152			94
Prior service amortization⁽²⁾	(3		)	(2		)	(1		)	(2		)	(8		)	(5		)	(41		)	(26		)
Actuarial loss amortization/settlement⁽²⁾	40			27			40			27			133			90			139			94
Fuji Xerox changes in defined benefit plans, net⁽³⁾	(8		)	(8		)	(5		)	(5		)	(108		)	(108		)	22			22
Other gains⁽⁴⁾	38			37			51			52			124			123			78			78
Changes in Defined Benefit Plans (Losses) Gains	(46		)	(15		)	125			97			(195		)	(107		)	350			262

Other Comprehensive (Loss) Income	(81		)	(46		)	(67		)	(101		)	(63		)	9			(140		)	(241		)
Less: Other comprehensive loss attributable to noncontrolling interests	—			—			(1		)	(1		)	(1		)	(1		)	(1		)	(1		)
Other Comprehensive (Loss) Income Attributable to Xerox	$	(81	)	$	(46	)	$	(66	)	$	(100	)	$	(62	)	$	10		$	(139	)	$	(240	)

_____________________________


(1)	Reclassified to Cost of sales - refer to Note 11 - Financial Instruments for additional information regarding our cash flow hedges.


(2)	Reclassified to Total Net Periodic Benefit Cost - refer to Note 13 - Employee Benefit Plans for additional information.


(3)	Represents our share of Fuji Xerox's benefit plan changes.


(4)	Primarily represents currency impact on cumulative amount of benefit plan net actuarial losses and prior service credits in AOCL.

Accumulated Other Comprehensive Loss (AOCL)

AOCL is comprised of the following:



	September 30, 2016			December 31, 2015
Cumulative translation adjustments	$	(2,309	)	$	(2,402	)
Other unrealized gains, net	25			1
Benefit plans net actuarial losses and prior service credits⁽¹⁾	(2,348		)	(2,241		)
Total Accumulated Other Comprehensive Loss Attributable to Xerox	$	(4,632	)	$	(4,642	)

_____________________________


(1)	Includes our share of Fuji Xerox.

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

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-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=66004124&loc=d3e637-108580

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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

Commitments and Contingencies Disclosure [Abstract]

Earnings per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share of common stock (shares in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Basic Earnings (Loss) per Share:
Net income (loss) from continuing operations attributable to Xerox	$	181		$	(31	)	$	370		$	267
Accrued dividends on preferred stock	(6		)	(6		)	(18		)	(18		)
Net Income (Loss) From Continuing Operations Available to Common Shareholders	175			(37		)	352			249
Net loss from discontinued operations attributable to Xerox	—			(3		)	—			(64		)
Net Income (Loss) Available to Common Shareholders	$	175		$	(40	)	$	352		$	185

Weighted average common shares outstanding	1,013,718			1,045,131			1,013,360			1,080,020
Basic Earnings (Loss) per Share:
Continuing operations	$	0.17		$	(0.04	)	$	0.35		$	0.23
Discontinued operations	—			—			—			(0.06		)
Total	$	0.17		$	(0.04	)	$	0.35		$	0.17

Diluted Earnings (Loss) per Share:
Net income (loss) from continuing operations attributable to Xerox	$	181		$	(31	)	$	370		$	267
Accrued dividends on preferred stock	(6		)	(6		)	(18		)	(18		)
Net Income (Loss) From Continuing Operations Available to Common Shareholders	$	175		$	(37	)	$	352		$	249
Net loss from discontinued operations attributable to Xerox	—			(3		)	—			(64		)
Net Income (Loss) Available to Common Shareholders	$	175		$	(40	)	$	352		$	185

Weighted average common shares outstanding - Basic	1,013,718			1,045,131			1,013,360			1,080,020
Common shares issuable with respect to:
Stock options	601			—			691			1,265
Restricted stock and performance shares	10,978			—			8,326			11,995
Convertible preferred stock	—			—			—			—
Weighted Average Common Shares Outstanding - Diluted	1,025,297			1,045,131			1,022,377			1,093,280
Diluted Earnings (Loss) per Share:
Continuing operations	$	0.17		$	(0.04	)	$	0.34		$	0.23
Discontinued operations	—			—			—			(0.06		)
Total	$	0.17		$	(0.04	)	$	0.34		$	0.17

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	1,307			3,391			1,217			2,125
Restricted stock and performance shares	22,631			25,996			25,283			18,214
Convertible preferred stock	26,966			26,966			26,966			26,966
Total Anti-Dilutive Securities	50,904			56,353			53,466			47,305

Dividends per Common Share	$	0.0775		$	0.0700		$	0.2325		$	0.2100

Contingencies and Litigation

9 Months Ended

Sep. 30, 2016

Contingencies and Litigation

Legal Matters

We are involved in a variety of claims, lawsuits, investigations and proceedings concerning securities law, intellectual property law, environmental law, employment law, commercial and contracts law, the Employee Retirement Income Security Act (ERISA) and regulatory matters. 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 Tax and Labor Contingencies

Our Brazilian operations are involved in various litigation matters and have received, or been the subject of, numerous governmental assessments related to indirect and other taxes, as well as disputes associated with former employees and contract labor. The tax matters, which comprise a significant portion of the total contingencies, principally relate to claims for taxes on the internal transfer of inventory, municipal service taxes on rentals, gross revenue taxes and import taxes and duties. We are disputing these tax matters and intend to vigorously defend our position. 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. The labor matters principally relate to claims made by former employees and contract labor for the equivalent payment of all social security and other related labor benefits, as well as consequential tax claims, as if they were regular employees.

As of September 30, 2016, the total amounts related to the unreserved portion of the tax and labor contingencies, inclusive of any related interest, amounted to approximately $749, with the increase from our December 31, 2015 balance of approximately $577 primarily related to currency and interest. With respect to the unreserved balance of $749, 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 of September 30, 2016, we had $85 of escrow cash deposits for matters we are disputing, and there are liens on certain Brazilian assets with a net book value of $4, and additional letters of credit and surety bonds of approximately $141 and $91, respectively, which include associated indexation. Generally, any escrowed amounts would be refundable and any liens would be removed to the extent the matters are resolved in our favor. We routinely assess all these matters as to probability of ultimately incurring a liability against our Brazilian operations and record our best estimate of the ultimate loss in situations where we assess the likelihood of an ultimate loss as probable.

Litigation Against the Company

State of Texas v. Xerox Corporation, Xerox State Healthcare, LLC, and ACS State Healthcare, LLC: On May 9, 2014, the State of Texas, via the Texas Office of Attorney General (the “State”), filed a lawsuit in the 53rd Judicial District Court of Travis County, Texas. The lawsuit alleges that Xerox Corporation, Xerox State Healthcare, LLC and ACS State Healthcare (collectively, the "Xerox Defendants") violated the Texas Medicaid Fraud Prevention Act in the administration of its contract with the Texas Department of Health and Human Services (“HHSC”). The State alleges that the Xerox Defendants made false representations of material facts regarding the processes, procedures, implementation and results regarding the prior authorization of orthodontic claims. The State seeks recovery of actual damages, two times the amount of any overpayments made as a result of unlawful acts, civil penalties, pre- and post-judgment interest and all costs and attorneys’ fees. The State references the amount in controversy as exceeding hundreds of millions of dollars. The Xerox Defendants filed their Answer in June, 2014 denying all allegations. The Xerox Defendants will continue to vigorously defend themselves in this matter. We do not believe it is probable that we will incur a material loss in excess of the amount accrued for this matter. In the course of litigation, we periodically engage in discussions with plaintiff’s counsel for possible resolution of the matter. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement for a significant amount, 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.

Oklahoma Firefighters Pension and Retirement System v. Xerox Corporation, Ursula M. Burns, Luca Maestri, Kathryn A. Mikells, Lynn R. Blodgett and Robert K. Zapfel: On October 21, 2016, the Oklahoma Firefighters Pension and Retirement System (“plaintiff”) filed a purported securities class action complaint against Xerox Corporation, Ursula Burns, Luca Maestri, Kathryn Mikells, Lynn Blodgett and Robert Zapfel in the U.S. District Court for the Southern District of New York on behalf of the plaintiff and certain purchasers or acquirers of Xerox common stock. The complaint alleges that defendants made false and misleading statements, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5, relating to the operations and prospects of Xerox’s Health Enterprise business. Plaintiff seeks, among other things, unspecified monetary damages and attorneys’ fees. Other, similar lawsuits may follow. Xerox and the individual defendants 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 Matters

On January 5, 2016, the Consumer Financial Protection Bureau (CFPB) notified Xerox Education Services, Inc. (XES) that, in accordance with the CFPB’s discretionary Notice and Opportunity to Respond and Advise (NORA) process, the CFPB’s Office of Enforcement is considering recommending that the CFPB take legal action against XES, alleging that XES violated the Consumer Financial Protection Act’s prohibition of unfair practices. Should the CFPB commence an action, it may seek restitution, civil monetary penalties, injunctive relief or other corrective action. The purpose of a NORA letter is to provide a party being investigated an opportunity to present its position to the CFPB before an enforcement action is recommended or commenced. This notice stems from an inquiry that commenced in 2014 when the Company, through XES, received and responded to a Civil Investigative Demand containing a broad request for information. During this process, XES self-disclosed to the Department of Education and the CFPB certain adjustments it had become aware that had not been timely made relating to its servicing of a small percentage of third-party student loans under outsourcing arrangements for various financial institutions. The CFPB and the Department of Education, as well as certain states' attorney general offices and other regulatory agencies, began similar reviews. The Company has cooperated and continues to fully cooperate with all regulatory agencies, and XES has submitted its NORA response. The Company cannot provide assurance that the CFPB or another party will not ultimately commence a legal action against XES in this matter nor is the Company able to predict the likely outcome of the investigations into this matter.

Other Contingencies

We have issued or provided the following guarantees as of September 30, 2016:


•	$344 for letters of credit issued to (i) guarantee our performance under certain services contracts; (ii) support certain insurance programs; and (iii) support our obligations related to the Brazil tax and labor contingencies.


•	$775 for outstanding surety bonds. Certain contracts, primarily those involving public sector customers, 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 of default in our performance of 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.

We have service arrangements where we service third party student loans in the Federal Family Education Loan program (FFEL) on behalf of various financial institutions. We service these loans for investors under outsourcing arrangements and do not acquire any servicing rights that are transferable by us to a third party. At September 30, 2016, we serviced a FFEL portfolio of approximately 1.6 million loans with an outstanding principal balance of approximately $24.1 billion. Some servicing agreements contain provisions that, under certain circumstances, require us to purchase the loans from the investor if the loan guaranty has been permanently terminated as a result of a loan default caused by our servicing error. If defaults caused by us are cured during an initial period, any obligation we may have to purchase these loans expires. Loans that we purchase may be subsequently cured, the guaranty reinstated and the loans repackaged for sale to third parties. We evaluate our exposure under our purchase obligations on defaulted loans and establish a reserve for potential losses, or default liability reserve, through a charge to the provision for loss on defaulted loans purchased. The reserve is evaluated periodically and adjusted based upon management’s analysis of the historical performance of the defaulted loans. As of September 30, 2016, other current liabilities included reserves of approximately $4 for losses on defaulted loans purchased. In addition to potential purchase obligations arising from servicing errors, various laws and regulations applicable to student loan borrowers could give rise to fines, penalties and other liabilities associated with loan servicing errors.

Indemnifications

We have indemnified, subject to certain deductibles and limits, the purchasers of businesses or divested assets for the occurrence of specified events under certain of our divestiture agreements. Where appropriate, an obligation for such indemnifications is recorded as a liability. Since the obligated amounts of these types of indemnifications are often not explicitly stated and/or are contingent on the occurrence of future events, the overall maximum amount of the obligation under such indemnifications cannot be reasonably estimated. Other than obligations recorded as liabilities at the time of divestiture, we have not historically made significant payments for these indemnifications. Additionally, under certain of our acquisition agreements, we have provided for additional consideration to be paid to the sellers if established financial targets are achieved post-closing. We have recognized liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of acquisition. Contingent obligations related to indemnifications arising from our divestitures and contingent consideration provided for by our acquisitions are not expected to be material to our financial position, results of operations or cash flows.

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Operating segment revenues and profitability

Operating segment revenues and profitability were as follows:



	Three Months Ended September 30,					Nine Months Ended September 30,
	Segment Revenue		Segment Profit (Loss)			Segment Revenue		Segment Profit(Loss)
2016
Services	$	2,398	$	226		$	7,350	$	652
Document Technology	1,626		213			5,017		601
Other	188		(65		)	511		(211		)
Total	$	4,212	$	374		$	12,878	$	1,042
2015
Services ⁽¹⁾	$	2,367	$	(196	)	$	7,360	$	172
Document Technology	1,778		248			5,488		715
Other	188		(55		)	544		(164		)
Total	$	4,333	$	(3	)	$	13,392	$	723

Reconciliation to pre-tax income (loss)



	Three Months Ended September 30,						Nine Months Ended September 30,
Reconciliation to Pre-tax Income	2016			2015			2016			2015
Segment Profit (Loss)	$	374		$	(3	)	$	1,042		$	723
Reconciling items:
Restructuring and related costs	(32		)	(20		)	(229		)	(191		)
Restructuring charges of Fuji Xerox	(2		)	(2		)	(3		)	(4		)
Business transformation costs⁽¹⁾	(2		)	(2		)	(3		)	(9		)
Amortization of intangible assets	(77		)	(77		)	(244		)	(233		)
Non-service retirement-related costs⁽²⁾	(34		)	(30		)	(112		)	(82		)
Equity in net income of unconsolidated affiliates	(39		)	(40		)	(98		)	(103		)
Separation costs⁽³⁾	(39		)	—			(75		)	—
Other	1			1			1			1
Pre-tax Income (Loss)	$	150		$	(173	)	$	279		$	102

__________________________


(1)	Business transformation costs represent incremental costs incurred directly in support of our business transformation and restructuring initiatives such as compensation costs for overlapping staff, consulting costs and training costs.


(2)	Represents the non-service elements of our defined-benefit pension and retiree-health plan costs. Refer to Note 13 - Employee Benefit Plans for details regarding these elements.


(3)	Separation costs are expenses incurred in connection with Xerox's planned separation into two independent, publicly-traded companies. These costs are primarily for third-party investment banking, accounting, legal, consulting and other similar types of services. Refer to Note 1 - Basis of Presentation for additional information regarding Xerox's planned separation.

Divestitures (Tables)

9 Months Ended

Sep. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Summarized Financial Information - Discontinued Operations

Summarized financial information for our Discontinued Operations in prior periods is as follows:



	Three Months Ended September 30, 2015								Nine Months Ended September 30, 2015
	ITO			Other		Total			ITO			Other		Total
Revenues	$	—		$	—	$	—		$	619		$	—	$	619
Income from operations ⁽¹⁾	—			—		—			104			—		104
Loss on disposal	(5		)	—		(5		)	(77		)	—		(77		)
Net (loss) income before income taxes	$	(5	)	$	—	$	(5	)	$	27		$	—	$	27
Income tax benefit (expense)	2			—		2			(91		)	—		(91		)
Loss from discontinued operations, net of tax	$	(3	)	$	—	$	(3	)	$	(64	)	$	—	$	(64	)

_______________


(1)	ITO Income from operations for the nine months ended September 30, 2015, excludes approximately $80 of depreciation and amortization expenses (including $14 of intangible amortization) since the business was held for sale.

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Schedule of accounts receivable, net

Accounts Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Accounts receivable, net were as follows:



	September 30, 2016			December 31, 2015
Amounts billed or billable	$	2,180		$	2,110
Unbilled amounts	360			289
Allowance for doubtful accounts	(74		)	(80		)
Accounts Receivable, Net	$	2,466		$	2,319

Schedule of accounts receivables sales

Accounts receivable sales were as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Accounts receivable sales	$	591		$	551		$	1,919		$	1,739
Deferred proceeds	54			67			184			186
Loss on sales of accounts receivable	4			3			12			9
Estimated decrease to operating cash flows⁽¹⁾	(60		)	(31		)	(114		)	(45		)

__________________________


(1)	Represents the difference between current and prior period receivable sales adjusted for the effects of: (i) the deferred proceeds, (ii) collections prior to the end of the quarter and, (iii) currency.

Finance Receivables, Net (Tables)

9 Months Ended

Sep. 30, 2016

Financing Receivable, Net [Abstract]

Finance Receivables Sales Activity

The following is a summary of our prior sales activity.



	Year Ended December 31,
	2013		2012
Net carrying value (NCV) sold	$	676	$	682
Allowance included in NCV	17		18
Cash proceeds received	635		630
Beneficial interests received	86		101

Finance Receivables Sales Impact on Operating Cash Flows

The net impact from the sales of finance receivables on operating cash flows is summarized below:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Impact from prior sales of finance receivables⁽¹⁾	$	(41	)	$	(79	)	$	(151	)	$	(273	)
Collections on beneficial interest	6			12			24			45
Estimated decrease to operating cash flows	$	(35	)	$	(67	)	$	(127	)	$	(228	)

____________________________

(1) Represents cash that would have been collected had we not sold finance receivables.

Allowance for Credit Losses on Financing Receivables

The following table is a rollforward of the allowance for doubtful finance receivables as well as the related investment in finance receivables:



Allowance for Credit Losses:	United States			Canada			Europe			Other⁽²⁾			Total
Balance at December 31, 2015⁽¹⁾	$	54		$	17		$	45		$	2		$	118
Provision	4			1			5			—			10
Charge-offs	(2		)	(2		)	(2		)	—			(6		)
Recoveries and other⁽³⁾	1			2			1			—			4
Balance at March 31, 2016	$	57		$	18		$	49		$	2		$	126
Provision	—			1			7			—			8
Charge-offs	(3		)	(2		)	(3		)	—			(8		)
Recoveries and other⁽³⁾	—			1			(2		)	—			(1		)
Balance at June 30, 2016	$	54		$	18		$	51		$	2		$	125
Provision	3			1			5			—			9
Charge-offs	(1		)	(2		)	(3		)	—			(6		)
Recoveries and other⁽³⁾	1			—			—			—			1
Balance at September 30, 2016	$	57		$	17		$	53		$	2		$	129
Finance receivables as of September 30, 2016 collectively evaluated for impairment ⁽⁴⁾	$	2,139		$	377		$	1,382		$	66		$	3,964

Balance at December 31, 2014⁽¹⁾	$	51		$	20		$	58		$	2		$	131
Provision	4			1			5			1			11
Charge-offs	—			(3		)	(1		)	(1		)	(5		)
Recoveries and other⁽³⁾	—			—			(6		)	—			(6		)
Balance at March 31, 2015	$	55		$	18		$	56		$	2		$	131
Provision	3			1			6			—			10
Charge-offs	(3		)	(2		)	(5		)	—			(10		)
Recoveries and other⁽³⁾	(1		)	1			3			—			3
Balance at June 30, 2015	$	54		$	18		$	60		$	2		$	134
Provision	2			1			6			—			9
Charge-offs	—			(3		)	(1		)	—			(4		)
Recoveries and other⁽³⁾	—			—			(1		)	—			(1		)
Balance at September 30, 2015	$	56		$	16		$	64		$	2		$	138
Finance receivables as of September 30, 2015 collectively evaluated for impairment ^(1),(4)	$	2,142		$	366		$	1,562		$	67		$	4,137

__________________


(1)	In the first quarter 2016, as a result of an internal reorganization, a U.S. leasing unit previously classified in Other was reclassified to the U.S. Prior year amounts have been revised to conform to current year presentation.


(2)	Includes developing market countries and smaller units.


(3)	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.


(4)	Total Finance receivables exclude the allowance for credit losses of $129 and $138 at September 30, 2016 and 2015, respectively.

Financing Receivable Credit Quality Indicators

Details about our finance receivables portfolio based on industry and credit quality indicators are as follows:



	September 30, 2016								December 31, 2015⁽⁴⁾
	Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables		Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables
Finance and other services	$	178	$	336	$	94	$	608	$	195	$	285	$	91	$	571
Government and education	553		57		6		616		575		48		7		630
Graphic arts	133		117		98		348		145		92		127		364
Industrial	83		73		25		181		89		62		22		173
Healthcare	77		49		16		142		90		46		19		155
Other	90		102		52		244		121		107		53		281
Total United States	1,114		734		291		2,139		1,215		640		319		2,174
Finance and other services	57		41		10		108		55		35		9		99
Government and education	55		6		1		62		59		7		2		68
Graphic arts	42		38		22		102		45		35		21		101
Industrial	23		13		3		39		23		12		3		38
Other	35		25		6		66		33		23		3		59
Total Canada	212		123		42		377		215		112		38		365
France	192		237		60		489		203		207		101		511
U.K./Ireland	190		73		1		264		235		91		3		329
Central⁽¹⁾	199		162		24		385		206		186		25		417
Southern⁽²⁾	42		134		14		190		36		138		17		191
Nordics⁽³⁾	28		25		1		54		24		35		2		61
Total Europe	651		631		100		1,382		704		657		148		1,509
Other	41		22		3		66		41		16		1		58
Total	$	2,018	$	1,510	$	436	$	3,964	$	2,175	$	1,425	$	506	$	4,106

_____________________________


(1)	Switzerland, Germany, Austria, Belgium and Holland.


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.


(4)	In the first quarter 2016, as a result of an internal reorganization, a U.S. leasing unit previously classified in Other was reclassified to the U.S. Prior year amounts have been reclassified to conform to current year presentation.

Finance Receivables Aging

The aging of our billed finance receivables is based upon the number of days an invoice is past due and is as follows:



	September 30, 2016
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Finance and other services	$	12	$	2	$	2	$	16	$	592	$	608	$	11
Government and education	17		1		3		21		595		616		23
Graphic arts	14		1		—		15		333		348		5
Industrial	4		1		1		6		175		181		5
Healthcare	3		1		1		5		137		142		5
Other	10		1		1		12		232		244		6
Total United States	60		7		8		75		2,064		2,139		55
Canada	3		—		—		3		374		377		9
France	4		—		—		4		485		489		28
U.K./Ireland	3		1		—		4		260		264		1
Central⁽¹⁾	2		1		2		5		380		385		12
Southern⁽²⁾	7		2		2		11		179		190		8
Nordics⁽³⁾	1		—		—		1		53		54		3
Total Europe	17		4		4		25		1,357		1,382		52
Other	3		—		—		3		63		66		—
Total	$	83	$	11	$	12	$	106	$	3,858	$	3,964	$	116

	December 31, 2015⁽⁴⁾
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Finance and other services	$	10	$	2	$	2	$	14	$	557	$	571	$	14
Government and education	12		1		4		17		613		630		37
Graphic arts	12		2		1		15		349		364		8
Industrial	5		1		1		7		166		173		7
Healthcare	4		1		1		6		149		155		9
Other	14		2		2		18		263		281		7
Total United States	57		9		11		77		2,097		2,174		82
Canada	3		—		—		3		362		365		9
France	—		—		—		—		511		511		25
U.K./Ireland	1		—		—		1		328		329		1
Central⁽¹⁾	3		1		1		5		412		417		7
Southern⁽²⁾	8		2		3		13		178		191		10
Nordics⁽³⁾	1		—		—		1		60		61		4
Total Europe	13		3		4		20		1,489		1,509		47
Other	1		1		—		2		56		58		—
Total	$	74	$	13	$	15	$	102	$	4,004	$	4,106	$	138

_____________________________


(1)	Switzerland, Germany, Austria, Belgium and Holland.


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.


(4)	In the first quarter 2016, as a result of an internal reorganization, a U.S. leasing unit previously classified in Other was reclassified to the U.S. Prior year amounts have been reclassified to conform to current year presentation.

Inventories (Tables)

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Inventories

The following is a summary of Inventories by major category:



	September 30, 2016		December 31, 2015
Finished goods	$	859	$	792
Work-in-process	58		51
Raw materials	102		99
Total Inventories	$	1,019	$	942

Investment in Affiliates, at Equity (Tables)

9 Months Ended

Sep. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

Equity in net income of unconsolidated affiliates

Our equity in net income of unconsolidated affiliates was as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Fuji Xerox	$	35	$	34	$	87	$	90
Other investments	4		6		11		13
Total Equity in Net Income of Unconsolidated Affiliates	$	39	$	40	$	98	$	103

Condensed Financial Information Of Equity Investment - Fuji Xerox

Condensed financial data of Fuji Xerox was as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Summary of Operations:
Revenues	$	2,695	$	2,518	$	7,823	$	7,638
Costs and expenses	2,492		2,333		7,285		7,064
Income before income taxes	203		185		538		574
Income tax expense	54		57		163		186
Net Income	149		128		375		388
Less: Net income – noncontrolling interests	2		1		5		5
Net Income – Fuji Xerox	$	147	$	127	$	370	$	383
Weighted Average Exchange Rate⁽¹⁾	102.41		122.11		108.45		120.88

_____________________________


(1)	Represents Yen/U.S. Dollar exchange rate used to translate.

Restructuring Programs (Tables)

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring Program Activity

Information related to restructuring program activity during the nine months ended September 30, 2016 is outlined below:



	Severance and Related Costs			Lease Cancellation and Other Costs			Asset Impairments⁽²⁾			Total
Balance at December 31, 2015	$	22		$	2		$	—		$	24
Provision	218			4			2			224
Reversals	(20		)	—			(5		)	(25		)
Net Current Period Charges⁽¹⁾	198			4			(3		)	199
Charges against reserve and currency	(118		)	(5		)	3			(120		)
Balance at September 30, 2016	$	102		$	1		$	—		$	103

_____________________________


(1)	Represents net amount recognized within the Condensed Consolidated Statements of Income for the period shown for restructuring and asset impairments charges.


(2)	Charges associated with asset impairments represent the write-down of the related assets to their new cost basis and are recorded concurrently with the recognition of the provision.

Reconciliation to the Condensed Consolidated Statements Of Cash Flows

Reconciliation to the Condensed Consolidated Statements of Cash Flows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Charges against reserve	$	(54	)	$	(30	)	$	(120	)	$	(242	)
Asset impairments	—			7			2			153
Effects of foreign currency and other non-cash items	(1		)	3			(2		)	8
Restructuring Cash Payments	$	(55	)	$	(20	)	$	(120	)	$	(81	)

Total Costs incurred with Restructuring programs, by segment

The following table summarizes the total amount of costs incurred in connection with these restructuring programs by segment:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016			2015
Services ⁽¹⁾	$	3	$	11	$	65		$	165
Document Technology	10		1		138			18
Other	—		8		(4		)	8
Total Net Restructuring Charges	$	13	$	20	$	199		$	191

_____________________________


(1)	The nine months ended September 30, 2015 includes $146 of software asset impairment charges.

Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Schedule Of Interest Expense And Interest Income

Interest expense and interest income were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Interest expense⁽¹⁾	$	81	$	88	$	250	$	265
Interest income⁽²⁾	86		87		255		268

____________


(1)	Includes Equipment financing interest as well as non-financing interest expense that is included in Other expenses, net in the Condensed Consolidated Statements of Income.


(2)	Includes Finance income as well as other interest income that is included in Other expenses, net in the Condensed Consolidated Statements of Income.

Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives

The following is a summary of our fair value hedges at September 30, 2016:



Debt Instrument	Year First Designated	Notional Amount		Net Fair Value		Weighted Average Interest Rate Paid		Interest Rate Received		Basis	Maturity
Senior Note 2021	2014	$	300	$	15	2.56	%	4.5	%	Libor	2021

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	September 30, 2016			December 31, 2015
Derivatives Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	24		$	4
	Other current liabilities	(2		)	(4		)
Foreign currency options	Other current liabilities	—			(1		)
Interest rate swaps	Other long-term assets	15			7
	Net Designated Derivative Asset	$	37		$	6

Derivatives NOT Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	62		$	51
	Other current liabilities	(6		)	(8		)
	Net Undesignated Derivative Asset	$	56		$	43

Summary of Derivatives	Total Derivative Assets	$	101		$	62
	Total Derivative Liabilities	(8		)	(13		)
	Net Derivative Asset	$	93		$	49

Derivative Instruments, Gain (Loss)

The following table provides a summary of gains (losses) on derivative instruments:



	Three Months Ended September 30,						Nine Months Ended September 30,
Gain (Loss) on Derivative Instruments	2016			2015			2016			2015
Fair Value Hedges - Interest rate contracts
Derivative (loss) gain recognized in interest expense	$	(3	)	$	7		$	8		$	7
Hedged item gain (loss) recognized in interest expense	3			(7		)	(8		)	(7		)

Cash Flow Hedges - Foreign exchange forward contracts and options
Derivative gain recognized in OCI (effective portion)	$	4		$	5		$	61		$	12
Derivative gain (loss) reclassified from AOCI to income - Cost of sales (effective portion)	17			(11		)	24			(21		)

Summary of Derivatives Not Designated as Hedging Instruments Gains (Losses)

The following table provides a summary of gains (losses) on non-designated derivative instruments:



Derivatives NOT Designated as Hedging Instruments		Three Months Ended September 30,				Nine Months Ended September 30,
Derivatives NOT Designated as Hedging Instruments	Location of Derivative Gain (Loss)	2016		2015		2016		2015
Foreign exchange contracts – forwards	Other expense – Currency gains (loss), net	$	33	$	33	$	182	$	(2	)

Fair Value of Financial Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair value of financial assets and liabilities



	September 30, 2016		December 31, 2015
Assets:
Foreign exchange contracts - forwards	$	86	$	55
Interest rate swaps	15		7
Deferred compensation investments in cash surrender life insurance	97		92
Deferred compensation investments in mutual funds	35		33
Total	$	233	$	187
Liabilities:
Foreign exchange contracts - forwards	$	8	$	12
Foreign currency options	—		1
Deferred compensation plan liabilities	127		125
Total	$	135	$	138

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 not measured at fair value on a recurring basis were as follows:



	September 30, 2016				December 31, 2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	1,423	$	1,423	$	1,368	$	1,368
Accounts receivable, net	2,466		2,466		2,319		2,319
Short-term debt	2,033		2,047		985		976
Long-term debt	5,346		5,537		6,354		6,395

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2016

Defined Benefit and Retiree Health Pension Plans, actual and expected cash contributions

Contributions

The following table summarizes cash contributions to our defined benefit pension plans and retiree health benefit plans.



	Nine Months Ended September 30,				Year Ended December 31,
	2016		2015		Estimated 2016⁽¹⁾		2015
U.S. Plans	$	20	$	40	$	25	$	177
Non-U.S. Plans	86		108		115		132
Total	$	106	$	148	$	140	$	309

Retiree Health	$	46	$	49	$	65	$	63

___________


(1)	These full year estimates are based on current expectations that we will make additional 2016 cash contributions of $34 ($5 U.S. and $29 Non-U.S) to our defined benefit pension plans and $19 to our retiree health benefit plans.

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 September 30,
	Pension Benefits
	U.S. Plans						Non-U.S. Plans						Retiree Health
Components of Net Periodic Benefit Costs:	2016			2015			2016			2015			2016			2015
Service cost	$	1		$	1		$	7		$	8		$	1		$	2
Interest cost	33			38			50			53			9			8
Expected return on plan assets	(35		)	(38		)	(63		)	(73		)	—			—
Recognized net actuarial loss	8			5			16			19			—			—
Amortization of prior service credit	—			—			(1		)	—			(2		)	(1		)
Recognized settlement loss	16			16			—			—			—			—
Defined Benefit Plans	23			22			9			7			8			9
Defined contribution plans	16			15			8			8			n/a			n/a
Net Periodic Benefit Cost	39			37			17			15			8			9

Other changes in plan assets and benefit obligations recognized in Other Comprehensive Loss (Income):
Net actuarial loss (gain)⁽¹⁾	113			(40		)	—			—			—			—
Amortization of prior service credit	—			—			1			—			2			1
Amortization of net actuarial loss	(24		)	(21		)	(16		)	(19		)	—			—
Total Recognized in Other Comprehensive Loss (Income)⁽²⁾	89			(61		)	(15		)	(19		)	2			1
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Loss (Income)	$	128		$	(24	)	$	2		$	(4	)	$	10		$	10



	Nine Months Ended September 30,
	Pension Benefits
	U.S. Plans						Non-U.S. Plans						Retiree Health
Components of Net Periodic Benefit Costs:	2016			2015			2016			2015			2016			2015
Service cost	$	3		$	3		$	23		$	25		$	4		$	6
Interest cost	106			114			155			159			25			25
Expected return on plan assets	(111		)	(114		)	(196		)	(220		)	—			—
Recognized net actuarial loss	20			18			50			59			1			1
Amortization of prior service credit	(1		)	(1		)	(3		)	(2		)	(4		)	(16		)
Recognized settlement loss	62			61			—			—			—			—
Recognized curtailment gain	—			—			—			—			—			(22		)
Defined Benefit Plans	79			81			29			21			26			(6		)
Defined contribution plans	45			46			28			28			n/a			n/a
Net Periodic Benefit Cost	124			127			57			49			26			(6		)

Other changes in plan assets and benefit obligations recognized in Other Comprehensive Loss (Income):
Net actuarial loss (gain)⁽¹⁾	370			(92		)	—			(2		)	(34		)	(58		)
Amortization of prior service credit	1			1			3			2			4			16
Amortization of net actuarial loss	(82		)	(79		)	(50		)	(59		)	(1		)	(1		)
Curtailment gain - recognition of net prior service credit	—			—			—			—			—			22
Total Recognized in Other Comprehensive Loss (Income)⁽²⁾	289			(170		)	(47		)	(59		)	(31		)	(21		)
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Loss (Income)	$	413		$	(43	)	$	10		$	(10	)	$	(5	)	$	(27	)

_____________________________


(1)	The net actuarial loss (gain) for U.S. Plans primarily reflects (i) the remeasurement of our primary U.S. pension plans as a result of the payment of periodic settlements; and (ii) adjustments for the actuarial valuation results based on January 1st plan census data.


(2)	Amounts represent the pre-tax effect included within Other comprehensive loss. Refer to Note 15 - Other Comprehensive (Loss) Income for related tax effects and the after-tax amounts.

Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2016

Stockholders' Equity Note [Abstract]

Schedule of Stockholders Equity



	Common Stock		Additional Paid-in Capital		Retained Earnings			AOCL⁽³⁾			Xerox Shareholders’ Equity			Non-controlling Interests			Total Equity
Balance at December 31, 2015	$	1,013	$	3,017	$	9,686		$	(4,642	)	$	9,074		$	43		$	9,117
Comprehensive income, net	—		—		370			10			380			7			387
Cash dividends declared - common⁽¹⁾	—		—		(237		)	—			(237		)	—			(237		)
Cash dividends declared - preferred⁽²⁾	—		—		(18		)	—			(18		)	—			(18		)
Stock option and incentive plans, net	1		54		—			—			55			—			55
Distributions to noncontrolling interests	—		—		—			—			—			(10		)	(10		)
Balance at September 30, 2016	$	1,014	$	3,071	$	9,801		$	(4,632	)	$	9,254		$	40		$	9,294



	Common Stock			Additional Paid-in Capital			Treasury Stock			Retained Earnings			AOCL⁽³⁾			Xerox Shareholders’ Equity			Non- controlling Interests			Total Equity
Balance at December 31, 2014	$	1,124		$	4,283		$	(105	)	$	9,535		$	(4,159	)	$	10,678		$	75		$	10,753
Comprehensive income (loss), net	—			—			—			203			(240		)	(37		)	12			(25		)
Cash dividends declared - common⁽¹⁾	—			—			—			(227		)	—			(227		)	—			(227		)
Cash dividends declared - preferred⁽²⁾	—			—			—			(18		)	—			(18		)	—			(18		)
Stock option and incentive plans, net	11			8			—			—			—			19			—			19
Payments to acquire treasury stock, including fees	—			—			(1,302		)	—			—			(1,302		)	—			(1,302		)
Cancellation of treasury stock	(57		)	(659		)	716			—			—			—			—			—
Distributions to noncontrolling interests	—			—			—			—			—			—			(43		)	(43		)
Balance at September 30, 2015	$	1,078		$	3,632		$	(691	)	$	9,493		$	(4,399	)	$	9,113		$	44		$	9,157

_____________________________


(1)	Cash dividends declared on common stock of $0.0775 per share in each quarter of 2016 and $0.07 per share in each quarter of 2015.


(2)	Cash dividends declared on preferred stock of $20.00 per share in each quarter of 2016 and 2015.


(3)	Refer to Note 15 - Other Comprehensive (Loss) Income for components of AOCL.

Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2016

Other Comprehensive Income (Loss) [Abstract]

Schedule of Comprehensive (Loss) Income

Other Comprehensive (Loss) Income is comprised of the following:



	Three Months Ended September 30,												Nine Months Ended September 30,
	2016						2015						2016						2015
	Pre-tax			Net of Tax			Pre-tax			Net of Tax			Pre-tax			Net of Tax			Pre-tax			Net of Tax
Translation Adjustments (Losses) Gains	$	(22	)	$	(22	)	$	(206	)	$	(206	)	$	96		$	92		$	(521	)	$	(521	)
Unrealized Gains (Losses):
Changes in fair value of cash flow hedges - gains	4			3			5			4			61			42			12			11
Changes in cash flow hedges reclassed to earnings⁽¹⁾	(17		)	(12		)	11			5			(24		)	(17		)	21			9
Other losses	—			—			(2		)	(1		)	(1		)	(1		)	(2		)	(2		)
Net Unrealized (Losses) Gains	(13		)	(9		)	14			8			36			24			31			18

Defined Benefit Plans (Losses) Gains:
Net actuarial (losses) gains	(113		)	(69		)	40			25			(336		)	(207		)	152			94
Prior service amortization⁽²⁾	(3		)	(2		)	(1		)	(2		)	(8		)	(5		)	(41		)	(26		)
Actuarial loss amortization/settlement⁽²⁾	40			27			40			27			133			90			139			94
Fuji Xerox changes in defined benefit plans, net⁽³⁾	(8		)	(8		)	(5		)	(5		)	(108		)	(108		)	22			22
Other gains⁽⁴⁾	38			37			51			52			124			123			78			78
Changes in Defined Benefit Plans (Losses) Gains	(46		)	(15		)	125			97			(195		)	(107		)	350			262

Other Comprehensive (Loss) Income	(81		)	(46		)	(67		)	(101		)	(63		)	9			(140		)	(241		)
Less: Other comprehensive loss attributable to noncontrolling interests	—			—			(1		)	(1		)	(1		)	(1		)	(1		)	(1		)
Other Comprehensive (Loss) Income Attributable to Xerox	$	(81	)	$	(46	)	$	(66	)	$	(100	)	$	(62	)	$	10		$	(139	)	$	(240	)

_____________________________


(1)	Reclassified to Cost of sales - refer to Note 11 - Financial Instruments for additional information regarding our cash flow hedges.


(2)	Reclassified to Total Net Periodic Benefit Cost - refer to Note 13 - Employee Benefit Plans for additional information.


(3)	Represents our share of Fuji Xerox's benefit plan changes.


(4)	Primarily represents currency impact on cumulative amount of benefit plan net actuarial losses and prior service credits in AOCL.

Schedule of Accumulated Other Comprehensive Loss

AOCL is comprised of the following:



	September 30, 2016			December 31, 2015
Cumulative translation adjustments	$	(2,309	)	$	(2,402	)
Other unrealized gains, net	25			1
Benefit plans net actuarial losses and prior service credits⁽¹⁾	(2,348		)	(2,241		)
Total Accumulated Other Comprehensive Loss Attributable to Xerox	$	(4,632	)	$	(4,642	)

_____________________________


(1)	Includes our share of Fuji Xerox.

Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Basic and Diluted Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share of common stock (shares in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Basic Earnings (Loss) per Share:
Net income (loss) from continuing operations attributable to Xerox	$	181		$	(31	)	$	370		$	267
Accrued dividends on preferred stock	(6		)	(6		)	(18		)	(18		)
Net Income (Loss) From Continuing Operations Available to Common Shareholders	175			(37		)	352			249
Net loss from discontinued operations attributable to Xerox	—			(3		)	—			(64		)
Net Income (Loss) Available to Common Shareholders	$	175		$	(40	)	$	352		$	185

Weighted average common shares outstanding	1,013,718			1,045,131			1,013,360			1,080,020
Basic Earnings (Loss) per Share:
Continuing operations	$	0.17		$	(0.04	)	$	0.35		$	0.23
Discontinued operations	—			—			—			(0.06		)
Total	$	0.17		$	(0.04	)	$	0.35		$	0.17

Diluted Earnings (Loss) per Share:
Net income (loss) from continuing operations attributable to Xerox	$	181		$	(31	)	$	370		$	267
Accrued dividends on preferred stock	(6		)	(6		)	(18		)	(18		)
Net Income (Loss) From Continuing Operations Available to Common Shareholders	$	175		$	(37	)	$	352		$	249
Net loss from discontinued operations attributable to Xerox	—			(3		)	—			(64		)
Net Income (Loss) Available to Common Shareholders	$	175		$	(40	)	$	352		$	185

Weighted average common shares outstanding - Basic	1,013,718			1,045,131			1,013,360			1,080,020
Common shares issuable with respect to:
Stock options	601			—			691			1,265
Restricted stock and performance shares	10,978			—			8,326			11,995
Convertible preferred stock	—			—			—			—
Weighted Average Common Shares Outstanding - Diluted	1,025,297			1,045,131			1,022,377			1,093,280
Diluted Earnings (Loss) per Share:
Continuing operations	$	0.17		$	(0.04	)	$	0.34		$	0.23
Discontinued operations	—			—			—			(0.06		)
Total	$	0.17		$	(0.04	)	$	0.34		$	0.17

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	1,307			3,391			1,217			2,125
Restricted stock and performance shares	22,631			25,996			25,283			18,214
Convertible preferred stock	26,966			26,966			26,966			26,966
Total Anti-Dilutive Securities	50,904			56,353			53,466			47,305

Dividends per Common Share	$	0.0775		$	0.0700		$	0.2325		$	0.2100

Basis of Presentation - Planned Company Separation (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2016 USD ($) Director	Sep. 30, 2016 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Conduent Incorporated - Number of Selected Director \| Director	7
Conduent Incorporated - Total Number of Director \| Director	9
Three-year strategic cost transformation program		3 years
Strategic transformation program, three-year cumulative cost reduction \| $		$ 2,400
Total company incremental savings from three-year cost transformation program \| $	$ 600	$ 600

Recent Accounting Pronouncements (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Collections on Beneficial Interests Received in sales of Accounts Receivable and Finance Receivables	$ 211	$ 305
Long-term Debt [Member] \| Accounting Standards Update 2015-03 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred Finance Costs, Net		28
Other Noncurrent Assets [Member] \| Accounting Standards Update 2015-03 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred Finance Costs, Net		32
Line of Credit [Member] \| Other Noncurrent Assets [Member] \| Accounting Standards Update 2015-03 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred Finance Costs, Net		$ 4

Segment Reporting - Segment Revenue and Segment Profit (Loss) (Details)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2016

USD ($)

Sep. 30, 2015

USD ($)

Sep. 30, 2016

USD ($)

service_offering

primaryreportablesegment

Sep. 30, 2015

USD ($)

Primary Reportable Segments, Number | primaryreportablesegment

$ 4,212

$ 4,333

$ 12,878

$ 13,392

374

(3)

1,042

723

Services [Member]

Software Implementation Charge

389

2,398

2,367

^[1]

7,350

7,360

^[1]

Software Implementation Charge - Revenue Reversal

226

(196)

^[1]

652

172

^[1]

116

Software Implementation Charge - Cost of Goods Sold

273

Document Technology [Member]

1,626

1,778

5,017

5,488

213

248

601

715

Other [Member]

188

511

544

Outsourcing Offerings [Member] | Services [Member]

$ (65)

$ (55)

$ (211)

$ (164)

Outsourcing Service Offerings, Number | service_offering

[1]

Services segment results for the three and nine months ended September 30, 2015 include a charge of $389 related to our Health Enterprise platform implementations in California and Montana. $116 of the charge was recorded as a reduction to revenues and the remainder of $273 was recorded to Cost of outsourcing, maintenance and rentals.

Segment Reporting - Reconciliation Of Operating Profit Loss (Details)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2016

USD ($)

Sep. 30, 2015

USD ($)

Sep. 30, 2016

USD ($)

Sep. 30, 2015

USD ($)

Segment Reporting [Abstract]

Number of Publicly Traded Companies - post separation

Restructuring and related costs

$ 374

$ (3)

$ 1,042

$ 723

Reconciling items:

229

191

Restructuring charges of Fuji Xerox

Business transformation costs

^[1]

(2)

(3)

(9)

Amortization of intangible assets

244

233

Non-service retirement-related costs

^[2]

112

Equity in net income of unconsolidated affiliates

(39)

(40)

(98)

(103)

Separation costs

^[3]

(39)

(75)

Other

Income (Loss) before Income Taxes and Equity Income

$ 150

$ (173)

$ 279

$ 102

[1]	Business transformation costs represent incremental costs incurred directly in support of our business transformation and restructuring initiatives such as compensation costs for overlapping staff, consulting costs and training costs.
[2]	Represents the non-service elements of our defined-benefit pension and retiree-health plan costs. Refer to Note 13 - Employee Benefit Plans for details regarding these elements.
[3]	Separation costs are expenses incurred in connection with Xerox's planned separation into two independent, publicly-traded companies. These costs are primarily for third-party investment banking, accounting, legal, consulting and other similar types of services. Refer to Note 1 - Basis of Presentation for additional information regarding Xerox's planned separation.

Divestitures (Details) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

12 Months Ended

Jun. 30, 2015

Sep. 30, 2016

Mar. 31, 2016

Sep. 30, 2015

Sep. 30, 2016

Sep. 30, 2015

Dec. 31, 2015

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Revenues

$ 0

$ 619

Income from operations (1)

^[1]

104

Loss on disposal

(5)

(77)

Net (loss) income before income taxes

(5)

Income tax benefit (expense)

(91)

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

$ 0

(3)

$ 0

(64)

ITO [Member]

Additional pre-tax loss on disposal

$ 24

Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax

$ 14

Payment for adjustment to sales price

$ 52

Payment/adjustment to sales price

$ 28

Payment due from closing

$ 24

Revenues

619

Income from operations (1)

^[1]

104

Loss on disposal

(5)

(77)

Net (loss) income before income taxes

(5)

Income tax benefit (expense)

(91)

Disposal Group, Including Discontinued Operation, Depreciation and Amortization

(3)

(64)

Disposal Group, Including Discontinued Operations, Amortization

All Other Discontinued Operations [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Revenues

Income from operations (1)

Loss on disposal

Net (loss) income before income taxes

Income tax benefit (expense)

Amounts billed or billable

$ 0

[1]	ITO Income from operations for the nine months ended September 30, 2015, excludes approximately $80 of depreciation and amortization expenses (including $14 of intangible amortization) since the business was held for sale.

Accounts Receivable, Net (Details) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2016

Sep. 30, 2015

Sep. 30, 2016

Sep. 30, 2015

Dec. 31, 2015

Receivables [Abstract]

$ 2,180

$ 2,110

Unbilled amounts

360

289

Allowance for doubtful accounts

(74)

(80)

Accounts Receivable, Net

2,466

2,319

Billable contracts receivable to be invoiced in the subsequent month

843

849

Accounts Receivable Sales Arrangements [Abstract]

Remaining account receivable sold and derecognized

540

660

Accounts, Notes, Loans and Financing Receivable [Line Items]

Estimated decrease to operating cash flows

(35)

$ (67)

(127)

$ (228)

Accounts Receivable [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Accounts receivable sales

591

551

1,919

1,739

Deferred proceeds

184

186

Loss on sales of accounts receivable

Estimated decrease to operating cash flows

^[1]

(60)

$ (31)

(114)

$ (45)

Other Current Assets [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Deferred proceeds receivables from sales of accounts receivables

$ 55

$ 61

[1]	Represents the difference between current and prior period receivable sales adjusted for the effects of: (i) the deferred proceeds, (ii) collections prior to the end of the quarter and, (iii) currency.

Finance Receivables, Net - Sale of Finance Receivables (Details) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2016

Sep. 30, 2015

Sep. 30, 2016

Sep. 30, 2015

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2015

Accounts, Notes, Loans and Financing Receivable [Line Items]

Net carrying value (NCV) sold

$ 676

$ 682

Allowance included in NCV

Cash proceeds received

635

630

Beneficial interests received

$ 86

$ 101

Finance receivables sold and derecognized principal value

$ 107

$ 238

Finance receivables sold and derecognized sales value

115

$ 115

256

Finance Receivable Beneficial Interest Weighted Average Life

2 years

Impact from prior sales of finance receivables

^[1]

(41)

$ (79)

$ (151)

$ (273)

Collections on beneficial interest

Estimated decrease to operating cash flows

(35)

(67)

(127)

(228)

Financing Receivable [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Collections on beneficial interest

$ 12

$ 45

Other Current Assets [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Beneficial Interest, Interest in Other Current Assets

Other Noncurrent Assets [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Beneficial interest from sale of finance receivables

$ 16

$ 30

[1]	Represents cash that would have been collected had we not sold finance receivables.

Finance Receivables, Net (Details) - USD ($)
$ in Millions

3 Months Ended

Sep. 30, 2016

Jun. 30, 2016

Mar. 31, 2016

Sep. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Financing Receivable, Allowance for Credit Losses [Roll Forward]

$ 125

$ 126

$ 118

^[1]

$ 134

$ 131

^[1]

(6)

(8)

(6)

(4)

(10)

(5)

^[2]

(1)

(6)

Financing Receivable, Collectively Evaluated for Impairment

129

125

126

138

134

131

^[3]

3,964

4,137

^[1]

Allowance for credit losses not included in the impairment evaluation

129

138

United States

Financing Receivable, Allowance for Credit Losses [Roll Forward]

^[1]

(1)

(3)

(2)

(3)

^[2]

(1)

Financing Receivable, Collectively Evaluated for Impairment

^[3]

2,139

2,142

^[1]

Canada

Financing Receivable, Allowance for Credit Losses [Roll Forward]

^[1]

(2)

(3)

(2)

(3)

^[2]

Financing Receivable, Collectively Evaluated for Impairment

^[3]

377

366

^[1]

Europe

Financing Receivable, Allowance for Credit Losses [Roll Forward]

^[1]

(3)

(2)

(1)

(5)

(1)

^[2]

(2)

(1)

(6)

Financing Receivable, Collectively Evaluated for Impairment

^[3]

1,382

1,562

^[1]

Other

Financing Receivable, Allowance for Credit Losses [Roll Forward]

^[4]

^[1]

^[4]

^[4]

(1)

^[2],[4]