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Document And Entity Information	3 Months Ended
Document And Entity Information	Mar. 31, 2017 shares
Document and Entity Information [Abstract]
Entity Registrant Name	Xerox Corporation
Entity Central Index Key	0000108772
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding	1,016,584,429

Condensed Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues
Sales	$ 936	$ 1,003
Services, maintenance and rentals	1,442	1,529
Financing	76	83
Total Revenues	2,454	2,615
Costs and Expenses
Cost of sales	567	614
Cost of services, maintenance and rentals	900	950
Cost of financing	33	33
Research, development and engineering expenses	118	126
Selling, administrative and general expenses	664	701
Restructuring and related costs	120	100
Amortization of intangible assets	14	14
Other expenses, net	54	45
Total Costs and Expenses	2,470	2,583
(Loss) Income before Income Taxes and Equity Income	(16)	32
Income tax benefit	(24)	(2)
Equity in net income of unconsolidated affiliates	16	37
Income from Continuing Operations	24	71
Loss from discontinued operations, net of tax	(6)	(35)
Net Income	18	36
Less: Net income attributable to noncontrolling interests	2	2
Net Income Attributable to Xerox	16	34
Net income from continuing operations	$ 22	$ 69
Basic Earnings (Loss) per Share:
Continuing operations (dollars per share)	$ 0.02	$ 0.06
Discontinued operations (dollars per share)	(0.01)	(0.03)
Total Basic Earnings per Share	0.01	0.03
Diluted Earnings (Loss) per Share:
Continuing operations (dollars per share)	0.02	0.06
Discontinued operations (dollars per share)	(0.01)	(0.03)
Total Diluted Earnings per Share	$ 0.01	$ 0.03

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

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Statement of Comprehensive Income [Abstract]

Net income

$ 18

$ 36

Less: Net income attributable to noncontrolling interests

Net Income Attributable to Xerox

Other Comprehensive Income (Loss), Net:

Translation adjustments, net

^[1]

136

191

Unrealized gains, net

^[1]

Changes in defined benefit plans, net

^[1]

(112)

Other Comprehensive Income, Net

^[1]

170

Less: Other comprehensive income, net attributable to noncontrolling interests

Other Comprehensive Income, Net Attributable to Xerox

169

Comprehensive Income, Net

Comprehensive Income, Net

188

124

Less: Comprehensive income, net attributable to noncontrolling interests

Comprehensive Income, Net Attributable to Xerox

$ 185

$ 122

[1]	Refer to Note 14 - Other Comprehensive Income for gross components of Other Comprehensive Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.

Condensed Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Assets, Current
Cash and cash equivalents	$ 1,045	$ 2,223
Accounts receivable, net	985	961
Billed portion of finance receivables, net	100	90
Finance receivables, net	1,261	1,256
Inventories	898	841
Assets of discontinued operations	0	1,002
Other current assets	426	619
Total current assets	4,715	6,992
Finance receivables due after one year, net	2,345	2,398
Equipment on operating leases, net	472	475
Land, buildings and equipment, net	641	660
Investments in affiliates, at equity	1,477	1,388
Intangible assets, net	280	290
Goodwill	3,808	3,787
Deferred tax assets, long-term	1,489	1,472
Other long-term assets	689	683
Total Assets	15,916	18,145
Liabilities and Equity
Short-term debt and current portion of long-term debt	13	1,011
Accounts payable	1,148	1,126
Accrued compensation and benefits costs	409	420
Unearned income	176	187
Liabilities of discontinued operations	0	1,002
Other current liabilities	878	908
Total current liabilities	2,624	4,654
Long-term debt	4,988	5,305
Pension and other benefit liabilities	2,239	2,240
Post-retirement medical benefits	694	698
Other long-term liabilities	191	193
Total Liabilities	10,736	13,090
Commitments and Contingencies (See Note 16)
Convertible Preferred Stock	214	214
Common stock	1,017	1,014
Additional paid-in capital	3,101	3,098
Retained earnings	4,987	5,039
Accumulated other comprehensive loss	(4,179)	(4,348)
Xerox shareholders’ equity	4,926	4,803
Noncontrolling interests	40	38
Total Equity	4,966	4,841
Total Liabilities and Equity	$ 15,916	$ 18,145
Shares of common stock issued and outstanding (in shares)	1,016,584	1,014,375

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities:
Net income	$ 18	$ 36
Loss from Discontinued Operations, net of tax	6	35
Income from Continuing Operations	24	71
Adjustments required to reconcile net income to cash flows from operating activities:
Depreciation and amortization	133	142
Provision for receivables	13	13
Provision for inventory	5	9
Net gain on sales of businesses and assets	0	(20)
Undistributed equity in net income of unconsolidated affiliates	(16)	(37)
Stock-based compensation	13	10
Restructuring and asset impairment charges	110	98
Payments for restructurings	(60)	(21)
Defined benefit pension cost	62	43
Contributions to defined benefit pension plans	(23)	(34)
Increase in accounts receivable and billed portion of finance receivables	(77)	(49)
Collections of deferred proceeds from sales of receivables	48	59
Increase in inventories	(58)	(99)
Increase in equipment on operating leases	(52)	(62)
Decrease in finance receivables	65	64
Collections on beneficial interest from sales of finance receivables	6	8
Increase in other current and long-term assets	(57)	(37)
Increase (decrease) in accounts payable and accrued compensation	21	(76)
Increase (decrease) in other current and long-term liabilities	3	(64)
Net change in income tax assets and liabilities	(41)	(32)
Net change in derivative assets and liabilities	55	17
Other operating, net	16	84
Net cash provided by operating activities of continuing operations	190	87
Net cash used in operating activities of discontinued operations	(80)	(112)
Net cash provided by (used in) operating activities	110	(25)
Cash Flows from Investing Activities:
Cost of additions to land, buildings and equipment	(17)	(19)
Proceeds from sales of land, buildings and equipment	1	19
Cost of additions to internal use software	(9)	(13)
Acquisitions, net of cash acquired	(11)	(18)
Other investing, net	1	1
Net cash used in investing activities of continuing operations	(35)	(30)
Net cash used in investing activities of discontinued operations	0	(95)
Net cash used in investing activities	(35)	(125)
Cash Flows from Financing Activities:
Net proceeds on short-term debt	1	749
Proceeds from issuance of long-term debt	3	4
Payments on long-term debt	(1,328)	(708)
Common stock dividends	(81)	(71)
Preferred stock dividends	(6)	(6)
Proceeds from issuances of common stock	0	1
Repurchases related to stock-based compensation	(7)	0
Distributions to noncontrolling interests	(1)	(11)
Proceeds from Conduent	161	0
Net cash used in financing activities	(1,258)	(42)
Effect of exchange rate changes on cash and cash equivalents	5	12
Increase in cash of discontinued operations	0	(2)
Decrease in cash and cash equivalents	(1,178)	(182)
Cash and cash equivalents at beginning of period	2,223	1,228
Cash and Cash Equivalents at End of Period	$ 1,045	$ 1,046

Basis of Presentation	3 Months Ended
Basis of Presentation	Mar. 31, 2017
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 2016 Annual Report on Form 10-K (2016 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 2016 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 “(Loss) Income before Income Taxes and Equity Income” as “pre-tax (loss) income.” Overview On December 31, 2016, Xerox Corporation completed the Separation of its Business Process Outsourcing (BPO) business from its Document Technology and Document Outsourcing (DT/DO) business (the “Separation”). The Separation was accomplished through the transfer of the BPO business into a new legal entity, Conduent Incorporated (Conduent), and then distributing one hundred percent (100%) of the outstanding common stock of Conduent to Xerox Corporation stockholders (the “Distribution”). The Separation and Distribution were structured to be tax-free for Xerox Corporation stockholders for federal income tax purposes. Conduent is now an independent public company trading on the New York Stock Exchange (“NYSE”) under the symbol “CNDT”. After the Separation, Xerox retained the DT/DO businesses and Xerox does not beneficially own any shares of Conduent common stock. As a result of the Separation and Distribution, the financial position and results of operations of the BPO business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented. The accompanying Notes to the Condensed Consolidated Financial Statements have all been revised to reflect the effect of the Separation and Distribution and all prior year balances have been revised accordingly to reflect continuing operations only. The historical statements of Comprehensive Income (Loss) and Shareholders' Equity have not been revised to reflect the Separation and instead reflect the Separation and Distribution as a final adjustment to the balances at December 31, 2016. Refer to Note 3 - Divestitures for additional information regarding discontinued operations. In connection with the Separation, Xerox entered into several agreements with Conduent to (1) effect the legal and structural separation of Xerox and Conduent, (2) govern the relationship between Xerox and Conduent up to and after the completion of the Separation and (3) allocate between Xerox and Conduent various assets, liabilities and obligations, including, among other things, employee benefits and tax-related assets and liabilities. The agreements entered into included a separation and distribution agreement, a transition service agreement, a tax matters agreement, an employee matters agreement, an intellectual property agreement and a trademark license agreement. Segment Discussion Following the separation of the BPO business, we realigned our operations to better manage the business and serve our customers and the markets in which we operate. In 2017 we transitioned to a geographic focus and are primarily organized from a sales perspective on the basis of “go-to-market” sales channels. These sales channels are structured to serve a range of customers for our products and services. As a result of this transition and change in structure, we concluded that we have one operating and reportable segment - the design, development and sale of document management systems and solutions. Our chief executive officer was identified as the chief operating decision maker (“CODM”). All of the Company’s activities are interrelated, and each activity is dependent upon and supportive of the other including product development, supply chain and back-office support services. In addition, all significant operating decisions are largely based upon an analysis of Xerox at the consolidated level, including assessments related to the Company’s incentive compensation plan, as well as operating decisions at the Board level.

Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2017

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. 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 expect to use the permitted modified retrospective method. Under current revenue recognition guidance, a significant majority of our revenue is recorded when we invoice customers, as that is normally the point at which all the revenue recognition criteria are met. Under ASU 2014-09, we expect the unit of accounting, that is, the identification of performance obligations, will be consistent with current revenue guidance. Additionally, based on the nature of our contracts we expect to continue to recognize revenue upon invoicing the customer for the large majority of our revenue when we adopt ASU 2014-09. Accordingly, the adoption of this standard is not expected to have a material impact for the large majority of our revenues. Additionally, a significant portion of our equipment sales are either recorded as sales-type leases or through direct sales to distributors and resellers and these sales are not expected to be impacted by the adoption of ASU 2014-09. We are continuing to evaluate certain contracts, which are more complex or where revenue recognition criteria are not currently met when invoicing occurs, to determine their treatment under ASU 2014-09. Although at this time we don’t expect a material change in our revenue recognition, in 2017 we expect to continue to evaluate the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements. Additionally, we are also assessing the impacts of the disclosures and cost deferral guidance required by ASU 2014-09. ASU 2014-09 requires additional disclosures. Our deferral of costs are minimal under our current practice and therefore the new guidance is expected to require more cost deferrals upon adoption. We are currently assessing the types and amounts of costs that may be eligible for deferral under the new standard.

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. The aggregate undiscounted value of our operating lease commitments at December 31, 2016 was approximately $450.

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 $270 and $305 of collections on beneficial interests as operating cash inflows on the Statement of Cash Flows for the years ended December 31, 2016 and 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.

Additionally, in November 2016 the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash. The update requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We held $149 and $179 of restricted cash, currently reported in other current or long-term assets at March 31, 2017 and December 31, 2016, respectively. This update is effective for our fiscal year beginning January 1, 2018. We are currently evaluating the impact, if any, that the adoption of ASU 2016-18 may have on our statements of cash flows in future reporting periods.

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. We adopted ASU 2016-09 effective for our fiscal year beginning January 1, 2017. The adoption of ASU No. 2016-09 is not expected to have a material impact on our financial condition, results of operations or cash flows. However, the impacts may vary and 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. For the three months ended March 31, 2017, we recognized $2 of additional tax expense related to the application of this update.

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.

Retirement Benefits

In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This update changes how employers that sponsor defined benefit pension plans and other postretirement plans present the net periodic benefit cost in the income statement. An employer is required to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. Other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendment also allows only the service cost component to be eligible for capitalization, when applicable. This update is effective for us beginning January 1, 2018. Although early adoption is permitted, we do not expect to early adopt. The amendment will be applied retrospectively for the presentation requirements and prospectively for the capitalization of the service cost component requirements. The adoption of this update is not expected to have a material impact on our financial condition, results of operations or cash flows.

Other Updates

In 2017, 2016 and 2015, the FASB also issued the following Accounting Standards Updates which did not have or are not expected to have a material impact on our financial condition, results of operations or cash flows upon adoption. Those updates are as follows:


•	Business Combinations: ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. This update is effective for our fiscal year beginning January 1, 2020.


•	Equity Method Accounting: ASU 2016-07, Equity Method and Joint Venture Accounting (Topic 353), Simplifying the Transition to the Equity Method of Accounting. This update was effective for our fiscal year beginning January 1, 2017.


•	Intangibles - Goodwill and Other: ASU 2017-04, Simplifying the Goodwill Impairment Test. This update is effective for our fiscal year beginning January 1, 2020, with early adoption permitted.


•	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.


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

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Divestitures

3 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

Business Process Outsourcing (BPO)

As previously disclosed, on December 31, 2016, Xerox completed the Separation of its BPO business through the Distribution of all of the issued and outstanding stock of Conduent to Xerox Corporation stockholders. As a result of the Separation and Distribution, the financial position and results of operations of the BPO Business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented.

Separation costs were $8 for the three months ended March 31, 2017 and 2016 and are included in Loss from discontinued operations, net of tax, in the accompanying Condensed Consolidated Statements of Income. Separation costs are primarily for third-party investment banking, accounting, legal, consulting and other similar types of services related to the Separation transaction as well as costs associated with the operational separation of the two companies, such as those related to human resources, brand management, real estate and information management to the extent they were not capitalized. Separation costs also include the costs associated with bonuses and restricted stock grants awarded to employees for retention through the Separation.

Summarized financial information for our Discontinued Operations is as follows:



	Three Months Ended March 31,
	2017			2016
Revenues	$	—		$	1,671

Cost of services	—			1,409
Other expenses⁽¹⁾	8			311
Total costs and expenses	8			1,720

Net loss before income taxes	(8		)	(49		)
Income tax benefit	2			14
Loss from discontinued operations, net of tax	$	(6	)	$	(35	)

_____________

(1) In addition to the $8 of Separation related costs, 2016 includes $1 of interest on the $1.0 billion Senior Unsecured Term Facility, which was required to be repaid upon completion of the Separation and therefore was also reported in the Loss from discontinued operations.

Refer to Note 9 - Debt for additional information regarding the Separation Debt Activity.

In January 2017, as provided for in the Separation Agreement, we received a distribution from Conduent of $161 representing the final adjustment required to set Conduent's cash balance at $225 as of the Separation. This amount was recorded as a receivable from Conduent included in Other Current Assets at December 31, 2016. The cash receipt was reported in Cash Flows from Financing Activities in the Condensed Consolidated Statement of Cash Flows as it represented an adjustment to our Distribution of Conduent.

- Definition

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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-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3A
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721659-107760

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5A
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721671-107760

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5D
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721677-107760

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=64827811&loc=d3e1474-107760

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721683-107760

+ Details

Accounts Receivable, Net

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Accounts Receivable, Net

Accounts receivable, net were as follows:



	March 31, 2017			December 31, 2016
Invoiced	$	661		$	651
Accrued	380			374
Allowance for doubtful accounts	(56		)	(64		)
Accounts Receivable, Net	$	985		$	961

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 receivables 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 certain accounts receivable, without recourse, to third-parties. The accounts receivables 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 are 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 their 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 Consolidated Balance Sheets and were $53 and $48 at March 31, 2017 and December 31, 2016, 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, $473 and $531 remained uncollected as of March 31, 2017 and December 31, 2016, respectively.

Accounts receivable sales were as follows:



	Three Months Ended March 31,
	2017			2016
Accounts receivable sales	$	511		$	592
Deferred proceeds	52			71
Loss on sales of accounts receivable	3			4
Estimated (decrease) increase to operating cash flows⁽¹⁾	(65		)	26

__________________________


(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

Finance Receivables – Allowance for Credit Losses and Credit Quality

Finance receivables include sales-type leases, direct financing leases and installment loans arising from the marketing of our equipment. 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, 2016	$	55		$	16		$	37		$	2	$	110
Provision	4			—			5			—		9
Charge-offs	(6		)	(2		)	(2		)	—		(10		)
Recoveries and other⁽³⁾	—			2			—			—		2
Balance at March 31, 2017	$	53		$	16		$	40		$	2	$	111
Finance receivables as of March 31, 2017 collectively evaluated for impairment ⁽⁴⁾	$	2,108		$	382		$	1,276		$	51	$	3,817

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
Finance receivables as of March 31, 2016 collectively evaluated for impairment⁽⁴⁾	$	2,157		$	387		$	1,491		$	63	$	4,098

__________________


(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 $111 and $126 at March 31, 2017 and 2016, 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 capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. The rating generally equates to a Standard & Poor's (S&P) rating of BBB- or better. Loss rates in this category are normally less than 1%.

•

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



	March 31, 2017								December 31, 2016
	Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables		Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables
Finance and other services	$	173	$	347	$	95	$	615	$	181	$	342	$	95	$	618
Government and education	520		63		7		590		543		57		8		608
Graphic arts	132		118		97		347		138		102		107		347
Industrial	81		77		24		182		82		78		24		184
Healthcare	81		49		17		147		79		47		17		143
Other	73		101		53		227		82		103		53		238
Total United States	1,060		755		293		2,108		1,105		729		304		2,138
Finance and other services	54		45		18		117		54		43		15		112
Government and education	50		5		3		58		52		6		2		60
Graphic arts	37		35		25		97		39		37		24		100
Industrial	21		13		8		42		21		13		6		40
Other	33		26		9		68		33		25		8		66
Total Canada	195		124		63		382		199		124		55		378
France	180		221		49		450		181		222		51		454
U.K./Ireland⁽⁴⁾	92		149		11		252		95		148		10		253
Central⁽¹⁾	179		142		18		339		182		148		19		349
Southern⁽²⁾	35		138		13		186		36		131		14		181
Nordics⁽³⁾	26		22		1		49		26		22		1		49
Total Europe	512		672		92		1,276		520		671		95		1,286
Other	34		15		2		51		35		15		2		52
Total	$	1,801	$	1,566	$	450	$	3,817	$	1,859	$	1,539	$	456	$	3,854

_____________________________


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


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.


(4)	The December 31, 2016 amounts have been revised to conform to 2017 presentation.

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



	March 31, 2017
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Finance and other services	$	15	$	2	$	2	$	19	$	596	$	615	$	12
Government and education	16		1		3		20		570		590		25
Graphic arts	13		1		—		14		333		347		4
Industrial	5		1		1		7		175		182		6
Healthcare	4		1		1		6		141		147		6
Other	11		2		2		15		212		227		4
Total United States	64		8		9		81		2,027		2,108		57
Canada	3		—		—		3		379		382		10
France	3		—		—		3		447		450		21
U.K./Ireland	2		—		—		2		250		252		—
Central⁽¹⁾	3		1		—		4		335		339		6
Southern⁽²⁾	4		1		2		7		179		186		6
Nordics⁽³⁾	1		—		—		1		48		49		—
Total Europe	13		2		2		17		1,259		1,276		33
Other	2		—		—		2		49		51		—
Total	$	82	$	10	$	11	$	103	$	3,714	$	3,817	$	100

	December 31, 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	$	13	$	3	$	1	$	17	$	601	$	618	$	11
Government and education	10		4		3		17		591		608		25
Graphic arts	13		1		—		14		333		347		5
Industrial	4		1		1		6		178		184		5
Healthcare	3		1		1		5		138		143		5
Other	9		2		1		12		226		238		5
Total United States	52		12		7		71		2,067		2,138		56
Canada	3		—		—		3		375		378		8
France	3		—		—		3		451		454		20
U.K./Ireland	2		1		—		3		250		253		1
Central⁽¹⁾	2		1		—		3		346		349		5
Southern⁽²⁾	5		1		1		7		174		181		6
Nordics⁽³⁾	1		—		—		1		48		49		1
Total Europe	13		3		1		17		1,269		1,286		33
Other	3		—		—		3		49		52		—
Total	$	71	$	15	$	8	$	94	$	3,760	$	3,854	$	97

_____________________________


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


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.

- Definition

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.

+ References + Details

Finance Receivables, Net

3 Months Ended

Mar. 31, 2017

Financing Receivable, Net [Abstract]

Finance Receivables, Net

Accounts Receivable, Net

Accounts receivable, net were as follows:



	March 31, 2017			December 31, 2016
Invoiced	$	661		$	651
Accrued	380			374
Allowance for doubtful accounts	(56		)	(64		)
Accounts Receivable, Net	$	985		$	961

Accounts Receivable Sales Arrangements

Of the accounts receivable sold and derecognized from our balance sheet, $473 and $531 remained uncollected as of March 31, 2017 and December 31, 2016, respectively.

Accounts receivable sales were as follows:



	Three Months Ended March 31,
	2017			2016
Accounts receivable sales	$	511		$	592
Deferred proceeds	52			71
Loss on sales of accounts receivable	3			4
Estimated (decrease) increase to operating cash flows⁽¹⁾	(65		)	26

__________________________


(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

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, 2016	$	55		$	16		$	37		$	2	$	110
Provision	4			—			5			—		9
Charge-offs	(6		)	(2		)	(2		)	—		(10		)
Recoveries and other⁽³⁾	—			2			—			—		2
Balance at March 31, 2017	$	53		$	16		$	40		$	2	$	111
Finance receivables as of March 31, 2017 collectively evaluated for impairment ⁽⁴⁾	$	2,108		$	382		$	1,276		$	51	$	3,817

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
Finance receivables as of March 31, 2016 collectively evaluated for impairment⁽⁴⁾	$	2,157		$	387		$	1,491		$	63	$	4,098

__________________


(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 $111 and $126 at March 31, 2017 and 2016, respectively.

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

•



	March 31, 2017								December 31, 2016
	Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables		Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables
Finance and other services	$	173	$	347	$	95	$	615	$	181	$	342	$	95	$	618
Government and education	520		63		7		590		543		57		8		608
Graphic arts	132		118		97		347		138		102		107		347
Industrial	81		77		24		182		82		78		24		184
Healthcare	81		49		17		147		79		47		17		143
Other	73		101		53		227		82		103		53		238
Total United States	1,060		755		293		2,108		1,105		729		304		2,138
Finance and other services	54		45		18		117		54		43		15		112
Government and education	50		5		3		58		52		6		2		60
Graphic arts	37		35		25		97		39		37		24		100
Industrial	21		13		8		42		21		13		6		40
Other	33		26		9		68		33		25		8		66
Total Canada	195		124		63		382		199		124		55		378
France	180		221		49		450		181		222		51		454
U.K./Ireland⁽⁴⁾	92		149		11		252		95		148		10		253
Central⁽¹⁾	179		142		18		339		182		148		19		349
Southern⁽²⁾	35		138		13		186		36		131		14		181
Nordics⁽³⁾	26		22		1		49		26		22		1		49
Total Europe	512		672		92		1,276		520		671		95		1,286
Other	34		15		2		51		35		15		2		52
Total	$	1,801	$	1,566	$	450	$	3,817	$	1,859	$	1,539	$	456	$	3,854

_____________________________


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


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.


(4)	The December 31, 2016 amounts have been revised to conform to 2017 presentation.

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



	March 31, 2017
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Finance and other services	$	15	$	2	$	2	$	19	$	596	$	615	$	12
Government and education	16		1		3		20		570		590		25
Graphic arts	13		1		—		14		333		347		4
Industrial	5		1		1		7		175		182		6
Healthcare	4		1		1		6		141		147		6
Other	11		2		2		15		212		227		4
Total United States	64		8		9		81		2,027		2,108		57
Canada	3		—		—		3		379		382		10
France	3		—		—		3		447		450		21
U.K./Ireland	2		—		—		2		250		252		—
Central⁽¹⁾	3		1		—		4		335		339		6
Southern⁽²⁾	4		1		2		7		179		186		6
Nordics⁽³⁾	1		—		—		1		48		49		—
Total Europe	13		2		2		17		1,259		1,276		33
Other	2		—		—		2		49		51		—
Total	$	82	$	10	$	11	$	103	$	3,714	$	3,817	$	100

	December 31, 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	$	13	$	3	$	1	$	17	$	601	$	618	$	11
Government and education	10		4		3		17		591		608		25
Graphic arts	13		1		—		14		333		347		5
Industrial	4		1		1		6		178		184		5
Healthcare	3		1		1		5		138		143		5
Other	9		2		1		12		226		238		5
Total United States	52		12		7		71		2,067		2,138		56
Canada	3		—		—		3		375		378		8
France	3		—		—		3		451		454		20
U.K./Ireland	2		1		—		3		250		253		1
Central⁽¹⁾	2		1		—		3		346		349		5
Southern⁽²⁾	5		1		1		7		174		181		6
Nordics⁽³⁾	1		—		—		1		48		49		1
Total Europe	13		3		1		17		1,269		1,286		33
Other	3		—		—		3		49		52		—
Total	$	71	$	15	$	8	$	94	$	3,760	$	3,854	$	97

_____________________________


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


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.

- Definition

+ References + Details

Inventories

3 Months Ended

Mar. 31, 2017

Inventory Disclosure [Abstract]

Inventories

The following is a summary of Inventories by major category:



	March 31, 2017		December 31, 2016
Finished goods	$	740	$	713
Work-in-process	61		47
Raw materials	97		81
Total Inventories	$	898	$	841

Investment in Affiliates, at Equity

3 Months Ended

Mar. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Investment in Affiliates, at Equity

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



	Three Months Ended March 31,
	2017		2016
Fuji Xerox	$	13	$	33
Other investments	3		4
Total Equity in Net Income of Unconsolidated Affiliates	$	16	$	37

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.

In the first quarter 2017, our Fuji Xerox equity earnings included an out-of-period adjustment of receivables. The receivables adjustment was the result of a review of accounting practices at Fuji Xerox’s New Zealand subsidiary (FXNZ) related to the recovery of receivables associated with certain bundled leasing transactions that occurred in, or prior to, Fuji Xerox’s fiscal year ending March 31, 2016. Fuji Xerox’s parent, Fujifilm Holdings Corporation, is in the process of completing its investigation. Our equity earnings in the first quarter include a charge of approximately $30, which represents our share of the current Fujifilm adjustments from this review. The impact of this adjustment was not considered to be material to any of our individual prior quarters or years and is not considered to be material to Xerox's anticipated full year 2017 results. While the investigation is ongoing, we are not currently aware of any additional adjustments related to this matter that would have a material effect on our financial statements.

Summarized financial data of Fuji Xerox, which includes a portion of the current Fujifilm receivables adjustment, was as follows:



	Three Months Ended March 31⁽²⁾,
	2017		2016
Summary of Operations:
Revenues	$	2,533	$	2,678
Costs and expenses	2,316		2,464
Income before income taxes	217		214
Income tax expense	65		65
Net Income	152		149
Less: Net income – noncontrolling interests	2		2
Net Income – Fuji Xerox	$	150	$	147
Weighted Average Exchange Rate⁽¹⁾	113.56		115.08

_____________________________


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

(2)

Until the investigation by Fujifilm is completed, the periods in which the current receivables adjustment may be recorded by FXNZ are subject to change, including the final amount of any adjustments for each of the three months ended March 31 in this table. In the first quarter 2017, one of the primary differences between the equity income we recorded for Fuji Xerox and our implied 25% share of Fuji Xerox’s first quarter 2017 net income in the summarized financial data is an additional amount recorded for the FXNZ adjustment.

Restructuring Programs

3 Months Ended

Mar. 31, 2017

Restructuring and Related Activities [Abstract]

Restructuring Programs

During the three months ended March 31, 2017, we recorded net restructuring and asset impairment charges of $110, which included approximately $110 of severance costs related to headcount reductions of approximately 1,000 employees worldwide and $2 of lease cancellation costs. These costs were offset by $2 of net reversals, primarily resulting from changes in estimated reserves from prior period initiatives.

We also recorded $10 of costs during the three months ended March 31, 2017, primarily related to professional support services associated with the implementation of the Strategic Transformation program.

Information related to restructuring program activity during the three months ended March 31, 2017 is outlined below:



	Severance and Related Costs			Lease Cancellation and Other Costs			Asset Impairments⁽²⁾		Total
Balance at December 31, 2016	$	104		$	23		$	—	$	127
Provision	110			2			—		112
Reversals	(2		)	—			—		(2		)
Net Current Period Charges⁽¹⁾	108			2			—		110
Charges against reserve and currency	(58		)	(1		)	—		(59		)
Balance at March 31, 2017	$	154		$	24		$	—	$	178

_____________________________


(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.

The following table summarizes the reconciliation to the Condensed Consolidated Statements of Cash Flows:



	Three Months Ended March 31,
	2017			2016
Charges against reserve and currency	$	(59	)	$	(19	)
Asset impairments	—			—
Effects of foreign currency and other non-cash items	(1		)	(2		)
Restructuring Cash Payments	$	(60	)	$	(21	)

Debt

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Debt

Debt Exchange

In March 2017, we completed a private offering to exchange portions of certain outstanding Senior Notes due 2018 through 2020 (collectively, the old notes), listed below, for $300 of new Senior Notes due 2022 and $322 in cash consideration, which includes a $22 exchange premium.

The following principal amounts of each series of old notes were validly tendered and subsequently cancelled:



Maturity Date	Coupon		Principal Amount Exchanged		4.07% Senior Notes Due March 2022		Cash Consideration
Senior Notes due May 15, 2018	6.350	%	$	260	130		143
Senior Notes due March 15, 2019	2.750	%	94		47		48
Senior Notes due December 15, 2019	5.625	%	96		48		56
Senior Notes due May 15, 2020	2.800	%	87		44		43
Senior Notes due August 20, 2020	3.500	%	38		19		20
Senior Notes due September 1, 2020	2.750	%	25		12		12
Total			$	600	$	300	$	322

The new Senior Notes bear a fixed coupon rate of 4.07% and are due in March 2022. There were no other significant changes to the terms between the old and new Senior Notes. We recorded a loss of approximately $9 for the exchange premium and other carrying value adjustments related to the portion of the old notes exchanged for cash. However, the old notes exchanged for the new Senior Notes were accounted for as a debt modification and therefore approximately $9 related to the exchange premium and other carrying value adjustments for that portion was carried over as an adjustment to the carrying value of new Senior Notes and is expected to be accreted over the term of the new Senior Notes. Transaction costs incurred on the exchange and paid to third parties of $4 were expensed as part of the loss.

Separation Debt Activity

In connection with the Separation, Conduent made a cash distribution of approximately $1.8 billion to Xerox in the fourth quarter 2016. Xerox used a portion of the cash distribution proceeds to repay its $1.0 billion Senior Unsecured Term Facility in January 2017, which was required to be repaid upon completion of the Separation. This $1.0 billion of cash and debt was excluded from the Cash and cash equivalents and Total Debt at December 31, 2016, respectively, and was reported in Current Assets and Current Liabilities of discontinued operations at December 31, 2016, respectively. In addition, due to the segregation of this cash at year-end, the payment was treated as a non-cash activity for the quarter ended March 31, 2017. Interest expense associated with this borrowing incurred during 2016 was included in Loss from discontinued operations, net of tax. Xerox used the balance of the proceeds received as well as cash on hand to repay its $500 6.75% Senior Notes and $500 2.95% Senior Notes that came due in first quarter 2017.

Interest Expense and Income

Interest expense and interest income were as follows:



	Three Months Ended March 31,
	2017		2016
Interest expense⁽¹⁾	$	69	$	87
Interest income⁽²⁾	78		84

____________


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


(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

3 Months Ended

Mar. 31, 2017

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 March 31, 2017, pay variable/receive fixed interest rate swaps with notional amounts of $300 and net asset fair value of $3 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 March 31, 2017:



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	$	3	2.65	%	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 March 31, 2017 and December 31, 2016, we had outstanding forward exchange and purchased option contracts with gross notional values of $3,125 and $3,149 respectively, with terms of less than 12 months. The associated currency exposures being hedged at March 31, 2017 were materially consistent with our year-end currency exposures, with the exception of our Euro/U.K. Pound Sterling exposure, which decreased by approximately $340, and our U.K. Pound Sterling/Euro exposure, which increased by approximately $290 (currencies hedged - buy/sell). 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 liability fair value of these contracts were $8 and $20 as of March 31, 2017 and December 31, 2016, respectively.

Summary of Derivative Instruments Fair Value

The following table provides a summary of the fair value amounts of our derivative instruments:



Designation of Derivatives	Balance Sheet Location	March 31, 2017			December 31, 2016
Derivatives Designated as Hedging Instruments
Foreign exchange contracts - forwards	Other current assets	$	5		$	6
	Other current liabilities	(13		)	(26		)
Foreign currency options	Other current assets	—			—
	Other current liabilities	—			—
Interest rate swaps	Other long-term assets	3			4
	Other long-term liabilities	—			—
	Net Designated Derivative Liability	$	(5	)	$	(16	)

Derivatives NOT Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	27		$	82
	Other current liabilities	(11		)	(13		)
	Net Undesignated Derivative Asset	$	16		$	69

Summary of Derivatives	Total Derivative Assets	$	35		$	92
	Total Derivative Liabilities	(24		)	(39		)
	Net Derivative Asset	$	11		$	53

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 March 31,
Gain (Loss) on Derivative Instruments	2017			2016
Fair Value Hedges - Interest rate contracts
Derivative (loss) gain recognized in interest expense	$	(1	)	$	8
Hedged item gain (loss) recognized in interest expense	1			(8		)

Cash Flow Hedges - Foreign exchange forward contracts and options
Derivative gain recognized in OCI (effective portion)	$	9		$	16
Derivative loss reclassified from AOCL to income - Cost of sales (effective portion)	(4		)	(1		)

During the three months ended March 31, 2017 and 2016 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 March 31, 2017, a net after-tax loss of $5 was recorded in accumulated other comprehensive loss associated with our cash flow hedging activity. The entire balance is expected to be reclassified into net income within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions.

Non-Designated Derivative Instruments Gains (Losses)

Non-designated derivative instruments are primarily instruments used to hedge foreign currency-denominated assets and liabilities. They are not designated as hedges since there is a natural offset for the re-measurement of the underlying foreign currency-denominated asset or liability.

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



Derivatives NOT Designated as Hedging Instruments		Three Months Ended March 31,
Derivatives NOT Designated as Hedging Instruments	Location of Derivative Gain	2017		2016
Foreign exchange contracts – forwards	Other expense – Currency gains, net	$	4	$	71

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 months ended March 31, 2017 and 2016, currency losses, net were $3 and $4, respectively.

- Definition

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.

+ References

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

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624171-113959

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Paragraph 1A
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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+ Details

Fair Value of Financial Assets and Liabilities

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities

The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases is Level 2 – Significant Other Observable Inputs.



	March 31, 2017		December 31, 2016
Assets:
Foreign exchange contracts - forwards	$	32	$	88
Interest rate swaps	3		4
Deferred compensation investments in mutual funds	16		15
Total	$	51	$	107
Liabilities:
Foreign exchange contracts - forwards	$	24	$	39
Deferred compensation plan liabilities	18		17
Total	$	42	$	56

We utilize the income approach to measure the fair value for our derivative assets and liabilities. The income approach uses pricing models that rely on market observable inputs such as yield curves, currency exchange rates and forward prices, and therefore are classified as Level 2.

Fair value for our deferred compensation plan investments in mutual funds is based on quoted market prices for those funds. Fair value for deferred compensation plan liabilities is based on the fair value of investments corresponding to employees’ investment selections.

Summary of Other Financial Assets and Liabilities

The estimated fair values of our other financial assets and liabilities were as follows:



	March 31, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	1,045	$	1,045	$	2,223	$	2,223
Accounts receivable, net	985		985		961		961
Short-term debt	13		13		1,011		1,015
Long-term debt	4,988		5,151		5,305		5,438

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.

- Definition

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.

+ References + Details

Employee Benefit Plans

3 Months Ended

Mar. 31, 2017

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows:



	Three Months Ended March 31,
	Pension Benefits
	U.S. Plans						Non-U.S. Plans						Retiree Health
Components of Net Periodic Benefit Costs:	2017			2016			2017			2016			2017			2016
Service cost	$	1		$	1		$	7		$	6		$	1		$	1
Interest cost	34			37			39			50			7			8
Expected return on plan assets	(31		)	(39		)	(53		)	(62		)	—			—
Recognized net actuarial loss	5			5			19			17			—			1
Amortization of prior service credit	—			—			(1		)	(1		)	(1		)	(1		)
Recognized settlement loss	42			29			—			—			—			—
Defined Benefit Plans	51			33			11			10			7			9
Defined contribution plans	6			7			7			9			n/a			n/a
Net Periodic Benefit Cost	57			40			18			19			7			9

Other changes in plan assets and benefit obligations recognized in Other Comprehensive Income:
Net actuarial loss⁽¹⁾	8			123			—			—			—			—
Amortization of prior service credit	—			—			1			1			1			1
Amortization of net actuarial loss	(47		)	(34		)	(19		)	(17		)	—			(1		)
Total Recognized in Other Comprehensive Income⁽²⁾	(39		)	89			(18		)	(16		)	1			—
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income	$	18		$	129		$	—		$	3		$	8		$	9

___________


(1)	The net actuarial loss for U.S. Plans primarily reflects the remeasurement of our primary U.S. pension plans as a result of the payment of periodic settlements.


(2)	Amounts represent the pre-tax effect included within Other comprehensive income. Refer to Note 14 - Other Comprehensive 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.



	Three Months Ended March 31,				Year Ended December 31,
	2017		2016		Estimated 2017		2016
U.S. Plans	$	6	$	6	$	174	$	24
Non-U.S. Plans	17		28		176		154
Total	$	23	$	34	$	350	$	178

Retiree Health	$	14	$	14	$	63	$	61

The 2017 expected pension plan contributions include $150 for our domestic tax-qualified defined benefit plans, comprised of $15 to meet the minimum funding requirements and $135 of additional voluntary contributions.

Shareholders' Equity

3 Months Ended

Mar. 31, 2017

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, 2016	$	1,014	$	3,098	$	5,039		$	(4,348	)	$	4,803		$	38		$	4,841
Comprehensive income, net	—		—		16			169			185			3			188
Cash dividends declared - common⁽¹⁾	—		—		(64		)	—			(64		)	—			(64		)
Cash dividends declared - preferred⁽²⁾	—		—		(4		)	—			(4		)	—			(4		)
Stock option and incentive plans, net	3		3		—			—			6			—			6
Distributions to noncontrolling interests	—		—		—			—			—			(1		)	(1		)
Balance at March 31, 2017	$	1,017	$	3,101	$	4,987		$	(4,179	)	$	4,926		$	40		$	4,966

As previously disclosed in Note 1 - Basis of Presentation, the historical statements of Shareholders' Equity were not revised to reflect the effect of the Separation and instead reflect the Separation as a final adjustment to the balances at December 31, 2016. Refer to Note 3 - Divestitures for additional information regarding the Separation.



	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	—		—		34			88			122			2			124
Cash dividends declared - common⁽¹⁾	—		—		(79		)	—			(79		)	—			(79		)
Cash dividends declared - preferred⁽²⁾	—		—		(6		)	—			(6		)	—			(6		)
Stock option and incentive plans, net	—		15		—			—			15			—			15
Distributions to noncontrolling interests	—		—		—			—			—			(8		)	(8		)
Balance at March 31, 2016	$	1,013	$	3,032	$	9,635		$	(4,554	)	$	9,126		$	37		$	9,163

_____________________________


(1)	Cash dividends declared on common stock of $0.0625 per share in 2017 and $0.0775 per share in 2016.


(2)	Cash dividends declared on preferred stock of $20.00 per share in 2017 and 2016.


(3)	Refer to Note 14 - Other Comprehensive Income for components of AOCL.

Treasury Stock

There were no repurchases of Xerox Common Stock pursuant to Board authorized share repurchase programs during the first quarter 2017.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(d))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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+ Details

Other Comprehensive Income

3 Months Ended

Mar. 31, 2017

Other Comprehensive Income (Loss) [Abstract]

Other Comprehensive Income

As previously disclosed in Note 1 - Basis of Presentation, the historical statements of Other Comprehensive Income have not been revised to reflect the effect of the Separation. Refer to Note 3 - Divestitures for additional information regarding the Separation. Other Comprehensive Income is comprised of the following:



	Three Months Ended March 31,
	2017						2016
	Pre-tax			Net of Tax			Pre-tax			Net of Tax
Translation Adjustments Gains	$	137		$	136		$	193		$	191
Unrealized Gains:
Changes in fair value of cash flow hedges - gains	9			6			16			9
Changes in cash flow hedges reclassed to earnings⁽¹⁾	4			2			1			—
Net Unrealized Gains	13			8			17			9

Defined Benefit Plans (Losses) Gains:
Net actuarial losses	(8		)	(5		)	(123		)	(76		)
Prior service amortization⁽²⁾	(2		)	(1		)	(2		)	(1		)
Actuarial loss amortization/settlement⁽²⁾	66			44			52			35
Fuji Xerox changes in defined benefit plans, net⁽³⁾	13			13			(75		)	(75		)
Other (losses) gains⁽⁴⁾	(25		)	(25		)	5			5
Changes in Defined Benefit Plans Gains (Losses)	44			26			(143		)	(112		)

Other Comprehensive Income	194			170			67			88
Less: Other comprehensive income attributable to noncontrolling interests	1			1			—			—
Other Comprehensive Income Attributable to Xerox	$	193		$	169		$	67		$	88

_____________________________


(1)	Reclassified to Cost of sales - refer to Note 10 - Financial Instruments for additional information regarding our cash flow hedges.


(2)	Reclassified to Total Net Periodic Benefit Cost - refer to Note 12 - 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:



	March 31, 2017			December 31, 2016
Cumulative translation adjustments	$	(2,139	)	$	(2,274	)
Other unrealized losses, net	(5		)	(13		)
Benefit plans net actuarial losses and prior service credits⁽¹⁾	(2,035		)	(2,061		)
Total Accumulated Other Comprehensive Loss Attributable to Xerox	$	(4,179	)	$	(4,348	)

_____________________________


(1)	Includes our share of Fuji Xerox.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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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

+ Details

Earnings per Share

3 Months Ended

Mar. 31, 2017

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 March 31,
	2017			2016
Basic Earnings (Loss) per Share:
Net income from continuing operations attributable to Xerox	$	22		$	69
Accrued dividends on preferred stock	(4		)	(6		)
Adjusted Net income from continuing operations available to common shareholders	18			63
Net loss from discontinued operations attributable to Xerox	(6		)	(35		)
Adjusted Net income available to common shareholders	$	12		$	28

Weighted average common shares outstanding	1,016,151			1,013,033
Basic Earnings (Loss) per Share:
Continuing operations	$	0.02		$	0.06
Discontinued operations	(0.01		)	(0.03		)
Basic Earnings per Share	$	0.01		$	0.03

Diluted Earnings (Loss) per Share:
Net income from continuing operations attributable to Xerox	$	22		$	69
Accrued dividends on preferred stock	(4		)	(6		)
Adjusted Net income from continuing operations available to common shareholders	18			63
Net loss from discontinued operations attributable to Xerox	(6		)	(35		)
Adjusted Net income available to common shareholders	$	12		$	28

Weighted average common shares outstanding	1,016,151			1,013,033
Common shares issuable with respect to:
Stock options	—			850
Restricted stock and performance shares	8,417			6,640
Convertible preferred stock	—			—
Adjusted Weighted average common shares outstanding	1,024,568			1,020,523
Diluted Earnings (Loss) per Share:
Continuing operations	$	0.02		$	0.06
Discontinued operations	(0.01		)	(0.03		)
Diluted Earnings per Share	$	0.01		$	0.03

The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive:
Stock options	—			2,104
Restricted stock and performance shares	15,749			18,718
Convertible preferred stock	26,966			26,966
Total Anti-Dilutive Securities	42,715			47,788

Dividends per Common Share	$	0.0625		$	0.0775

Contingencies and Litigation	3 Months Ended
Contingencies and Litigation	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Contingencies and Litigation	Contingencies and Litigation Legal Matters We are involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities law; governmental entity contracting; servicing and procurement law; intellectual property law; environmental law; employment law; the Employee Retirement Income Security Act (ERISA); and other laws and regulations. We determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. We assess our potential liability by analyzing our litigation and regulatory matters using available information. We develop our views on estimated losses in consultation with outside counsel handling our defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. Brazil 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 and gross revenue taxes. We are disputing these tax matters and intend to vigorously defend our positions. Based on the opinion of legal counsel and current reserves for those matters deemed probable of loss, we do not believe that the ultimate resolution of these matters will materially impact our results of operations, financial position or cash flows. 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 March 31, 2017, the total amounts related to the unreserved portion of the tax and labor contingencies, inclusive of any related interest, amounted to approximately $640, with the decrease from our December 31, 2016 balance of approximately $750, primarily related to closed cases partially offset by currency and interest. With respect to the unreserved balance of $640, 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 March 31, 2017, we had $87 of escrow cash deposits for matters we are disputing and additional letters of credit and surety bonds of approximately $152 and $98, respectively, which include associated indexation. There were no liens on any of our Brazilian assets as of March 31, 2017. 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 Defendants”) violated the Texas Medicaid Fraud Prevention Act in the administration of ACS’s contract with the Texas Department of Health and Human Services (“HHSC”). Xerox Corporation provided a guaranty of contractual performance with respect to the ACS contract. The State alleges that the 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 Defendants filed their Answer in June, 2014 denying all allegations. The Defendants will continue to vigorously defend themselves in this matter. This matter is a “Conduent Liability”, as defined in the Separation and Distribution Agreement dated as of December 31, 2016 between Xerox Corporation and Conduent Incorporated, for which Conduent is required to indemnify Xerox. Conduent is entitled to direct the defense of this matter. Oklahoma Firefighters Pension and Retirement System v. Xerox Corporation, Ursula M. Burns, Luca Maestri, Kathryn A. Mikells, Lynn R. Blodgett, Robert K. Zapfel, David H. Bywater and Mary Scanlon: 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 (collectively, “defendants”) 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 alleged 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 sought, among other things, unspecified monetary damages and attorneys’ fees. Other, similar lawsuits may follow. On December 28, 2016, the Court entered a stipulated order setting out a schedule for amendment of the complaint and for defendants’ response to that complaint following the Court’s appointment of lead plaintiff under the Private Securities Litigation Reform Act. On February 28, 2017, the Court issued an opinion and order appointing the Arkansas Public Employees Retirement System ("APERS") as lead plaintiff. On May 2, 2017, APERS filed an amended complaint, alleging substantially similar claims and seeking substantially similar relief, but adding David Bywater and Mary Scanlon as defendants. Xerox will vigorously defend against this matter. At this time, it is premature to make any conclusion regarding the probability of incurring material losses in this litigation. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement, there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in determination, judgment, or settlement occurs. Other Contingencies We have issued or provided approximately $398 of guarantees as of March 31, 2017 in the form of letters of credit or surety bonds issued to i) support certain insurance programs; ii) support our obligations related to the Brazil tax and labor contingencies; and iii) support certain contracts, primarily with public sector customers, which require us to provide a surety bond as a guarantee of our performance of contractual obligations. In general, we would only be liable for the amount of these guarantees in the event we defaulted in performing our obligations under each contract; the probability of which we believe is remote. We believe that our capacity in the surety markets as well as under various credit arrangements (including our Credit Facility) is sufficient to allow us to respond to future requests for proposals that require such credit support. 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.

Divestitures (Tables)

3 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Summarized Financial Information - Discontinued Operations

Summarized financial information for our Discontinued Operations is as follows:



	Three Months Ended March 31,
	2017			2016
Revenues	$	—		$	1,671

Cost of services	—			1,409
Other expenses⁽¹⁾	8			311
Total costs and expenses	8			1,720

Net loss before income taxes	(8		)	(49		)
Income tax benefit	2			14
Loss from discontinued operations, net of tax	$	(6	)	$	(35	)

_____________

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
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+ Details

Accounts Receivable, Net (Tables)

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Schedule of accounts receivable, net

Accounts receivable, net were as follows:



	March 31, 2017			December 31, 2016
Invoiced	$	661		$	651
Accrued	380			374
Allowance for doubtful accounts	(56		)	(64		)
Accounts Receivable, Net	$	985		$	961

Schedule of accounts receivables sales

Accounts receivable sales were as follows:



	Three Months Ended March 31,
	2017			2016
Accounts receivable sales	$	511		$	592
Deferred proceeds	52			71
Loss on sales of accounts receivable	3			4
Estimated (decrease) increase to operating cash flows⁽¹⁾	(65		)	26

__________________________


(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)

3 Months Ended

Mar. 31, 2017

Financing Receivable, Net [Abstract]

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, 2016	$	55		$	16		$	37		$	2	$	110
Provision	4			—			5			—		9
Charge-offs	(6		)	(2		)	(2		)	—		(10		)
Recoveries and other⁽³⁾	—			2			—			—		2
Balance at March 31, 2017	$	53		$	16		$	40		$	2	$	111
Finance receivables as of March 31, 2017 collectively evaluated for impairment ⁽⁴⁾	$	2,108		$	382		$	1,276		$	51	$	3,817

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
Finance receivables as of March 31, 2016 collectively evaluated for impairment⁽⁴⁾	$	2,157		$	387		$	1,491		$	63	$	4,098

__________________


(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 $111 and $126 at March 31, 2017 and 2016, respectively.

Financing Receivable Credit Quality Indicators

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



	March 31, 2017								December 31, 2016
	Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables		Investment Grade		Non-investment Grade		Substandard		Total Finance Receivables
Finance and other services	$	173	$	347	$	95	$	615	$	181	$	342	$	95	$	618
Government and education	520		63		7		590		543		57		8		608
Graphic arts	132		118		97		347		138		102		107		347
Industrial	81		77		24		182		82		78		24		184
Healthcare	81		49		17		147		79		47		17		143
Other	73		101		53		227		82		103		53		238
Total United States	1,060		755		293		2,108		1,105		729		304		2,138
Finance and other services	54		45		18		117		54		43		15		112
Government and education	50		5		3		58		52		6		2		60
Graphic arts	37		35		25		97		39		37		24		100
Industrial	21		13		8		42		21		13		6		40
Other	33		26		9		68		33		25		8		66
Total Canada	195		124		63		382		199		124		55		378
France	180		221		49		450		181		222		51		454
U.K./Ireland⁽⁴⁾	92		149		11		252		95		148		10		253
Central⁽¹⁾	179		142		18		339		182		148		19		349
Southern⁽²⁾	35		138		13		186		36		131		14		181
Nordics⁽³⁾	26		22		1		49		26		22		1		49
Total Europe	512		672		92		1,276		520		671		95		1,286
Other	34		15		2		51		35		15		2		52
Total	$	1,801	$	1,566	$	450	$	3,817	$	1,859	$	1,539	$	456	$	3,854

_____________________________


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


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.


(4)	The December 31, 2016 amounts have been revised to conform to 2017 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:



	March 31, 2017
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Finance and other services	$	15	$	2	$	2	$	19	$	596	$	615	$	12
Government and education	16		1		3		20		570		590		25
Graphic arts	13		1		—		14		333		347		4
Industrial	5		1		1		7		175		182		6
Healthcare	4		1		1		6		141		147		6
Other	11		2		2		15		212		227		4
Total United States	64		8		9		81		2,027		2,108		57
Canada	3		—		—		3		379		382		10
France	3		—		—		3		447		450		21
U.K./Ireland	2		—		—		2		250		252		—
Central⁽¹⁾	3		1		—		4		335		339		6
Southern⁽²⁾	4		1		2		7		179		186		6
Nordics⁽³⁾	1		—		—		1		48		49		—
Total Europe	13		2		2		17		1,259		1,276		33
Other	2		—		—		2		49		51		—
Total	$	82	$	10	$	11	$	103	$	3,714	$	3,817	$	100

	December 31, 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	$	13	$	3	$	1	$	17	$	601	$	618	$	11
Government and education	10		4		3		17		591		608		25
Graphic arts	13		1		—		14		333		347		5
Industrial	4		1		1		6		178		184		5
Healthcare	3		1		1		5		138		143		5
Other	9		2		1		12		226		238		5
Total United States	52		12		7		71		2,067		2,138		56
Canada	3		—		—		3		375		378		8
France	3		—		—		3		451		454		20
U.K./Ireland	2		1		—		3		250		253		1
Central⁽¹⁾	2		1		—		3		346		349		5
Southern⁽²⁾	5		1		1		7		174		181		6
Nordics⁽³⁾	1		—		—		1		48		49		1
Total Europe	13		3		1		17		1,269		1,286		33
Other	3		—		—		3		49		52		—
Total	$	71	$	15	$	8	$	94	$	3,760	$	3,854	$	97

_____________________________


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


(2)	Italy, Greece, Spain and Portugal.


(3)	Sweden, Norway, Denmark and Finland.

Inventories (Tables)

3 Months Ended

Mar. 31, 2017

Inventory Disclosure [Abstract]

Inventories

The following is a summary of Inventories by major category:



	March 31, 2017		December 31, 2016
Finished goods	$	740	$	713
Work-in-process	61		47
Raw materials	97		81
Total Inventories	$	898	$	841

Investment in Affiliates, at Equity (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31,
	2017		2016
Fuji Xerox	$	13	$	33
Other investments	3		4
Total Equity in Net Income of Unconsolidated Affiliates	$	16	$	37

Summarized Financial Information Of Equity Investment - Fuji Xerox

Summarized financial data of Fuji Xerox, which includes a portion of the current Fujifilm receivables adjustment, was as follows:



	Three Months Ended March 31⁽²⁾,
	2017		2016
Summary of Operations:
Revenues	$	2,533	$	2,678
Costs and expenses	2,316		2,464
Income before income taxes	217		214
Income tax expense	65		65
Net Income	152		149
Less: Net income – noncontrolling interests	2		2
Net Income – Fuji Xerox	$	150	$	147
Weighted Average Exchange Rate⁽¹⁾	113.56		115.08

_____________________________


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

(2)

Restructuring Programs (Tables)

3 Months Ended

Mar. 31, 2017

Restructuring and Related Activities [Abstract]

Restructuring Program Activity

Information related to restructuring program activity during the three months ended March 31, 2017 is outlined below:



	Severance and Related Costs			Lease Cancellation and Other Costs			Asset Impairments⁽²⁾		Total
Balance at December 31, 2016	$	104		$	23		$	—	$	127
Provision	110			2			—		112
Reversals	(2		)	—			—		(2		)
Net Current Period Charges⁽¹⁾	108			2			—		110
Charges against reserve and currency	(58		)	(1		)	—		(59		)
Balance at March 31, 2017	$	154		$	24		$	—	$	178

_____________________________


(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

The following table summarizes the reconciliation to the Condensed Consolidated Statements of Cash Flows:



	Three Months Ended March 31,
	2017			2016
Charges against reserve and currency	$	(59	)	$	(19	)
Asset impairments	—			—
Effects of foreign currency and other non-cash items	(1		)	(2		)
Restructuring Cash Payments	$	(60	)	$	(21	)

Debt (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Schedule of Debt Exchange

The following principal amounts of each series of old notes were validly tendered and subsequently cancelled:



Maturity Date	Coupon		Principal Amount Exchanged		4.07% Senior Notes Due March 2022		Cash Consideration
Senior Notes due May 15, 2018	6.350	%	$	260	130		143
Senior Notes due March 15, 2019	2.750	%	94		47		48
Senior Notes due December 15, 2019	5.625	%	96		48		56
Senior Notes due May 15, 2020	2.800	%	87		44		43
Senior Notes due August 20, 2020	3.500	%	38		19		20
Senior Notes due September 1, 2020	2.750	%	25		12		12
Total			$	600	$	300	$	322

Schedule Of Interest Expense And Interest Income

Interest expense and interest income were as follows:



	Three Months Ended March 31,
	2017		2016
Interest expense⁽¹⁾	$	69	$	87
Interest income⁽²⁾	78		84

____________


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


(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)

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives

The following is a summary of our fair value hedges at March 31, 2017:



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	$	3	2.65	%	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	March 31, 2017			December 31, 2016
Derivatives Designated as Hedging Instruments
Foreign exchange contracts - forwards	Other current assets	$	5		$	6
	Other current liabilities	(13		)	(26		)
Foreign currency options	Other current assets	—			—
	Other current liabilities	—			—
Interest rate swaps	Other long-term assets	3			4
	Other long-term liabilities	—			—
	Net Designated Derivative Liability	$	(5	)	$	(16	)

Derivatives NOT Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	27		$	82
	Other current liabilities	(11		)	(13		)
	Net Undesignated Derivative Asset	$	16		$	69

Summary of Derivatives	Total Derivative Assets	$	35		$	92
	Total Derivative Liabilities	(24		)	(39		)
	Net Derivative Asset	$	11		$	53

Derivative Instruments, Gain (Loss)

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



	Three Months Ended March 31,
Gain (Loss) on Derivative Instruments	2017			2016
Fair Value Hedges - Interest rate contracts
Derivative (loss) gain recognized in interest expense	$	(1	)	$	8
Hedged item gain (loss) recognized in interest expense	1			(8		)

Cash Flow Hedges - Foreign exchange forward contracts and options
Derivative gain recognized in OCI (effective portion)	$	9		$	16
Derivative loss reclassified from AOCL to income - Cost of sales (effective portion)	(4		)	(1		)

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

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



Derivatives NOT Designated as Hedging Instruments		Three Months Ended March 31,
Derivatives NOT Designated as Hedging Instruments	Location of Derivative Gain	2017		2016
Foreign exchange contracts – forwards	Other expense – Currency gains, net	$	4	$	71

Fair Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair value of financial assets and liabilities



	March 31, 2017		December 31, 2016
Assets:
Foreign exchange contracts - forwards	$	32	$	88
Interest rate swaps	3		4
Deferred compensation investments in mutual funds	16		15
Total	$	51	$	107
Liabilities:
Foreign exchange contracts - forwards	$	24	$	39
Deferred compensation plan liabilities	18		17
Total	$	42	$	56

Estimated fair values of financial assets and liabilities not measured at fair value on a recurring basis

The estimated fair values of our other financial assets and liabilities were as follows:



	March 31, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	1,045	$	1,045	$	2,223	$	2,223
Accounts receivable, net	985		985		961		961
Short-term debt	13		13		1,011		1,015
Long-term debt	4,988		5,151		5,305		5,438

- Definition

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.

+ References + Details

Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2017

Compensation and Retirement Disclosure [Abstract]

Components of net periodic benefit cost and other changes in plan assets and benefit obligations

The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows:



	Three Months Ended March 31,
	Pension Benefits
	U.S. Plans						Non-U.S. Plans						Retiree Health
Components of Net Periodic Benefit Costs:	2017			2016			2017			2016			2017			2016
Service cost	$	1		$	1		$	7		$	6		$	1		$	1
Interest cost	34			37			39			50			7			8
Expected return on plan assets	(31		)	(39		)	(53		)	(62		)	—			—
Recognized net actuarial loss	5			5			19			17			—			1
Amortization of prior service credit	—			—			(1		)	(1		)	(1		)	(1		)
Recognized settlement loss	42			29			—			—			—			—
Defined Benefit Plans	51			33			11			10			7			9
Defined contribution plans	6			7			7			9			n/a			n/a
Net Periodic Benefit Cost	57			40			18			19			7			9

Other changes in plan assets and benefit obligations recognized in Other Comprehensive Income:
Net actuarial loss⁽¹⁾	8			123			—			—			—			—
Amortization of prior service credit	—			—			1			1			1			1
Amortization of net actuarial loss	(47		)	(34		)	(19		)	(17		)	—			(1		)
Total Recognized in Other Comprehensive Income⁽²⁾	(39		)	89			(18		)	(16		)	1			—
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income	$	18		$	129		$	—		$	3		$	8		$	9

___________


(1)	The net actuarial loss for U.S. Plans primarily reflects the remeasurement of our primary U.S. pension plans as a result of the payment of periodic settlements.


(2)	Amounts represent the pre-tax effect included within Other comprehensive income. Refer to Note 14 - Other Comprehensive Income for related tax effects and the after-tax amounts.

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

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



	Three Months Ended March 31,				Year Ended December 31,
	2017		2016		Estimated 2017		2016
U.S. Plans	$	6	$	6	$	174	$	24
Non-U.S. Plans	17		28		176		154
Total	$	23	$	34	$	350	$	178

Retiree Health	$	14	$	14	$	63	$	61

Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2017

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, 2016	$	1,014	$	3,098	$	5,039		$	(4,348	)	$	4,803		$	38		$	4,841
Comprehensive income, net	—		—		16			169			185			3			188
Cash dividends declared - common⁽¹⁾	—		—		(64		)	—			(64		)	—			(64		)
Cash dividends declared - preferred⁽²⁾	—		—		(4		)	—			(4		)	—			(4		)
Stock option and incentive plans, net	3		3		—			—			6			—			6
Distributions to noncontrolling interests	—		—		—			—			—			(1		)	(1		)
Balance at March 31, 2017	$	1,017	$	3,101	$	4,987		$	(4,179	)	$	4,926		$	40		$	4,966



	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	—		—		34			88			122			2			124
Cash dividends declared - common⁽¹⁾	—		—		(79		)	—			(79		)	—			(79		)
Cash dividends declared - preferred⁽²⁾	—		—		(6		)	—			(6		)	—			(6		)
Stock option and incentive plans, net	—		15		—			—			15			—			15
Distributions to noncontrolling interests	—		—		—			—			—			(8		)	(8		)
Balance at March 31, 2016	$	1,013	$	3,032	$	9,635		$	(4,554	)	$	9,126		$	37		$	9,163

_____________________________


(1)	Cash dividends declared on common stock of $0.0625 per share in 2017 and $0.0775 per share in 2016.


(2)	Cash dividends declared on preferred stock of $20.00 per share in 2017 and 2016.


(3)	Refer to Note 14 - Other Comprehensive Income for components of AOCL.

Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2017

Other Comprehensive Income (Loss) [Abstract]

Schedule of Other Comprehensive Income (Loss)

Other Comprehensive Income is comprised of the following:



	Three Months Ended March 31,
	2017						2016
	Pre-tax			Net of Tax			Pre-tax			Net of Tax
Translation Adjustments Gains	$	137		$	136		$	193		$	191
Unrealized Gains:
Changes in fair value of cash flow hedges - gains	9			6			16			9
Changes in cash flow hedges reclassed to earnings⁽¹⁾	4			2			1			—
Net Unrealized Gains	13			8			17			9

Defined Benefit Plans (Losses) Gains:
Net actuarial losses	(8		)	(5		)	(123		)	(76		)
Prior service amortization⁽²⁾	(2		)	(1		)	(2		)	(1		)
Actuarial loss amortization/settlement⁽²⁾	66			44			52			35
Fuji Xerox changes in defined benefit plans, net⁽³⁾	13			13			(75		)	(75		)
Other (losses) gains⁽⁴⁾	(25		)	(25		)	5			5
Changes in Defined Benefit Plans Gains (Losses)	44			26			(143		)	(112		)

Other Comprehensive Income	194			170			67			88
Less: Other comprehensive income attributable to noncontrolling interests	1			1			—			—
Other Comprehensive Income Attributable to Xerox	$	193		$	169		$	67		$	88

_____________________________


(1)	Reclassified to Cost of sales - refer to Note 10 - Financial Instruments for additional information regarding our cash flow hedges.


(2)	Reclassified to Total Net Periodic Benefit Cost - refer to Note 12 - 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:



	March 31, 2017			December 31, 2016
Cumulative translation adjustments	$	(2,139	)	$	(2,274	)
Other unrealized losses, net	(5		)	(13		)
Benefit plans net actuarial losses and prior service credits⁽¹⁾	(2,035		)	(2,061		)
Total Accumulated Other Comprehensive Loss Attributable to Xerox	$	(4,179	)	$	(4,348	)

_____________________________


(1)	Includes our share of Fuji Xerox.

Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31,
	2017			2016
Basic Earnings (Loss) per Share:
Net income from continuing operations attributable to Xerox	$	22		$	69
Accrued dividends on preferred stock	(4		)	(6		)
Adjusted Net income from continuing operations available to common shareholders	18			63
Net loss from discontinued operations attributable to Xerox	(6		)	(35		)
Adjusted Net income available to common shareholders	$	12		$	28

Weighted average common shares outstanding	1,016,151			1,013,033
Basic Earnings (Loss) per Share:
Continuing operations	$	0.02		$	0.06
Discontinued operations	(0.01		)	(0.03		)
Basic Earnings per Share	$	0.01		$	0.03

Diluted Earnings (Loss) per Share:
Net income from continuing operations attributable to Xerox	$	22		$	69
Accrued dividends on preferred stock	(4		)	(6		)
Adjusted Net income from continuing operations available to common shareholders	18			63
Net loss from discontinued operations attributable to Xerox	(6		)	(35		)
Adjusted Net income available to common shareholders	$	12		$	28

Weighted average common shares outstanding	1,016,151			1,013,033
Common shares issuable with respect to:
Stock options	—			850
Restricted stock and performance shares	8,417			6,640
Convertible preferred stock	—			—
Adjusted Weighted average common shares outstanding	1,024,568			1,020,523
Diluted Earnings (Loss) per Share:
Continuing operations	$	0.02		$	0.06
Discontinued operations	(0.01		)	(0.03		)
Diluted Earnings per Share	$	0.01		$	0.03

The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive:
Stock options	—			2,104
Restricted stock and performance shares	15,749			18,718
Convertible preferred stock	26,966			26,966
Total Anti-Dilutive Securities	42,715			47,788

Dividends per Common Share	$	0.0625		$	0.0775

Basis of Presentation - Planned Company Separation (Details)	Dec. 31, 2016
Conduent [Member]
Discontinued Operation, percentage of business divested	100.00%

Basis of Presentation - Segment Change (Details)	3 Months Ended
Basis of Presentation - Segment Change (Details)	Mar. 31, 2017 service_offering
Segment Change [Abstract]
Number of Reportable Segments	1

Recent Accounting Pronouncements (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
ASU 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Leases, Future Minimum Payments Due		$ 450
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		270	$ 305
ASU 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stock Compensation Tax Expense Net Reclass from APIC to Income Taxes	$ 2
ASU 2016-18, Statement of Cash Flows [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Restricted Cash and Cash Equivalents	$ 149	$ 179

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

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Dec. 31, 2016

Mar. 04, 2016

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

Separation costs

$ 8

Total Costs and Expenses

2,470

2,583

Loss from discontinued operations, net of tax

(6)

(35)

Interest expense

^[1]

Proceeds from Conduent

161

Conduent [Domain]

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

Revenues

1,671

Cost of services

1,409

Other expenses(1)

^[2]

311

Total Costs and Expenses

1,720

Net loss before income taxes

(8)

(49)

Income tax benefit

Loss from discontinued operations, net of tax

(6)

(35)

Interest expense

$ 1

Proceeds from Conduent

$ 161

Conduent Cash Balance at Separation

$ 225

Senior Debt Obligations [Member]

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

Unsecured Debt

$ 1,000

[1]	Includes Cost of financing as well as non-financing interest expense that is included in Other expenses, net in the Condensed Consolidated Statements of Income.
[2]	In addition to the $8 of Separation related costs, 2016 includes $1 of interest on the $1.0 billion Senior Unsecured Term Facility, which was required to be repaid upon completion of the Separation and therefore was also reported in the Loss from discontinued operations.

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

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Dec. 31, 2016

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

Accounts Receivable, Net

$ 985

$ 961

Accounts Receivable Sales Arrangements [Abstract]

Remaining account receivable sold and derecognized

473

531

Accounts Receivable [Member]

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

Invoiced

661

651

Accrued

380

374

Allowance for doubtful accounts

(56)

(64)

Accounts receivable sales

511

$ 592

Deferred proceeds

Loss on sales of accounts receivable

Estimated (decrease) increase to operating cash flows(1)

^[1]

(65)

$ 26

Other Current Assets [Member]

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

Deferred proceeds

$ 53

$ 48

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

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Financing Receivable, Allowance for Credit Losses [Roll Forward]

Beginning Balance

$ 110

$ 118

^[1]

Provision

Charge-offs

(10)

(6)

Recoveries and other

^[2]

Ending Balance

111

126

Financing Receivable, Collectively Evaluated for Impairment

^[3]

3,817

4,098

Allowance for credit losses not included in the impairment evaluation

111

126

United States

Financing Receivable, Allowance for Credit Losses [Roll Forward]

Beginning Balance

^[1]

Provision

Charge-offs

(6)

(2)

Recoveries and other

^[2]

Ending Balance

Financing Receivable, Collectively Evaluated for Impairment

^[3]

2,108

2,157

Canada

Financing Receivable, Allowance for Credit Losses [Roll Forward]

^[1]

(2)

^[2]

Financing Receivable, Collectively Evaluated for Impairment

^[3]

382

387

Europe

Financing Receivable, Allowance for Credit Losses [Roll Forward]

^[1]

(2)

^[2]

Financing Receivable, Collectively Evaluated for Impairment

^[3]

1,276

1,491

Other

Financing Receivable, Allowance for Credit Losses [Roll Forward]

Beginning Balance

^[4]

^[1]

^[4]

^[4]

^[2],[4]

^[4]

Financing Receivable, Collectively Evaluated for Impairment

^[3],[4]

$ 51

$ 63

[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 the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.
[3]	Total Finance receivables exclude the allowance for credit losses of $111 and $126 at March 31, 2017 and 2016, respectively.
[4]	Includes developing market countries and smaller units.

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

3 Months Ended

Mar. 31, 2017

Dec. 31, 2016

Financing Receivable, Recorded Investment [Line Items]

Loss Rates Of Customers With Investment Grade Credit Quality

1.00%

Loss Rates Of Customers With Non Investment Grade Credit Quality Low Range

2.00%

Loss Rates Of Customers With Non Investment Grade Credit Quality High Range

4.00%

Loss Rates Of Customers With Substandard Doubtful Credit Quality

10.00%

Inventories (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Inventories, net [Abstract]
Finished goods	$ 740	$ 713
Work-in-process	61	47
Raw materials	97	81
Total Inventories	$ 898	$ 841

Debt - Exchange (Details) $ in Millions	3 Months Ended
Debt - Exchange (Details) $ in Millions	Mar. 31, 2017 USD ($)
Debt Conversion [Line Items]
Principal Amount Exchanged	$ 600
4.07% Senior Notes Due March 2022	300
Cash Consideration	$ 322
Debt Exchange, New Senior Notes Coupon	4.07%
Debt Exchange, Conversion Premium	$ 22
Debt Exchange, New Senior Notes, Maturity Date	March 2022
Loss on Extinguishment of Debt Exchanged for Cash	$ 9
Debt Exchange, Exchange Premium and Other Carrying Value Adjustments on Old Notes	9
Debt Issuance Costs Incurred During Noncash or Partial Noncash Transaction	$ 4
4.07% Senior Notes due March 17, 2022 [Member]
Debt Conversion [Line Items]
Debt Conversion, Converted Instrument, Issuance Date, Month and Year	March 2017
4.07% Senior Notes Due March 2022	$ 300
Senior Notes due May 2018 [Member]
Debt Conversion [Line Items]
Coupon	6.35%
Principal Amount Exchanged	$ 260
4.07% Senior Notes Due March 2022	130
Cash Consideration	$ 143
Senior Notes due March 2019 [Member]
Debt Conversion [Line Items]
Coupon	2.75%
Principal Amount Exchanged	$ 94
4.07% Senior Notes Due March 2022	47
Cash Consideration	$ 48
Senior Notes due December 2019 [Member]
Debt Conversion [Line Items]
Coupon	5.625%
Principal Amount Exchanged	$ 96
4.07% Senior Notes Due March 2022	48
Cash Consideration	$ 56
Senior Notes due May 2020 [Member]
Debt Conversion [Line Items]
Coupon	2.80%
Principal Amount Exchanged	$ 87
4.07% Senior Notes Due March 2022	44
Cash Consideration	$ 43
Senior Notes due August 2020 [Member]
Debt Conversion [Line Items]
Coupon	3.50%
Principal Amount Exchanged	$ 38
4.07% Senior Notes Due March 2022	19
Cash Consideration	$ 20
Senior Notes due September 2020 [Member]
Debt Conversion [Line Items]
Coupon	2.75%
Principal Amount Exchanged	$ 25
4.07% Senior Notes Due March 2022	12
Cash Consideration	$ 12

Debt - Debt Issuances (Details) - USD ($) $ in Millions	3 Months Ended
Debt - Debt Issuances (Details) - USD ($) $ in Millions	Dec. 31, 2016	Mar. 15, 2017	Feb. 01, 2017	Mar. 04, 2016
Debt Instrument [Line Items]
Cash Distribution, Conduent to Xerox - prior to distribution date	$ 1,800
Senior Notes due 2017 6.75% [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross			$ 500
Debt Instrument, Interest Rate, Stated Percentage			6.75%
Senior Notes due 2017 2.95% [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross		$ 500
Debt Instrument, Interest Rate, Stated Percentage		2.95%
Senior Debt Obligations [Member]
Debt Instrument [Line Items]
Unsecured Debt				$ 1,000
Conduent cash paid to Xerox, for Xerox debt repayment [Member]
Debt Instrument [Line Items]
Cash Distribution, Conduent to Xerox - prior to distribution date	$ 1,000

Financial Instruments - Fair Value Hedges (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Derivative [Line Items]
Derivative, Notional Amount	$ 3,125	$ 3,149
Senior Notes Due 2021 [Member]
Derivative [Line Items]
Notional Amount	300
Derivative Asset, Fair Value, Gross Asset	$ 3
Weighted Average Interest Rate Paid	2.65%
Interest Rate Received	4.50%
Euro U K Pound Sterling [Member]
Derivative [Line Items]
Change in Notional Value	$ (340)
U K Pound Sterling Euro [Member]
Derivative [Line Items]
Change in Notional Value	$ 290

Financial Instruments - Summary of Derivative Instruments Fair Value (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative Asset (Liability)	$ 11	$ 53
Assets [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Assets	35	92
Liabilities [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Liabilities	(24)	(39)
Senior Notes Due 2021 [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Assets	3
Derivatives Designated as Hedging Instruments [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative Asset (Liability)	(8)	(20)
Derivatives Designated as Hedging Instruments [Member] \| Liabilities [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative Asset (Liability)	(5)	(16)
Derivatives Designated as Hedging Instruments [Member] \| Foreign exchange contracts - forwards [Member] \| Other current assets [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Assets	5	6
Derivatives Designated as Hedging Instruments [Member] \| Foreign exchange contracts - forwards [Member] \| Other current liabilities [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Liabilities	(13)	(26)
Derivatives Designated as Hedging Instruments [Member] \| Currency options [Member] \| Other current assets [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Assets	0	0
Derivatives Designated as Hedging Instruments [Member] \| Currency options [Member] \| Other current liabilities [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Liabilities	0	0
Derivatives Designated as Hedging Instruments [Member] \| Interest Rate Swap [Member] \| Other long-term assets [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Assets	3	4
Derivatives Designated as Hedging Instruments [Member] \| Interest Rate Swap [Member] \| Other long-term liabilities [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Liabilities	0	0
Not Designated as Hedging Instrument [Member] \| Foreign exchange contracts - forwards [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative Asset (Liability)	16	69
Not Designated as Hedging Instrument [Member] \| Foreign exchange contracts - forwards [Member] \| Other current assets [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Assets	27	82
Not Designated as Hedging Instrument [Member] \| Foreign exchange contracts - forwards [Member] \| Other current liabilities [Member]
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Total Derivative Liabilities	$ (11)	$ (13)

Financial Instruments - Summary of Derivative Instruments Gain (Losses) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Summary of Derivative Instruments Gains (Losses) [Abstract]
Net losses recorded in AOCL expected to be reclassified to net income in the future	$ 5
Foreign Currency Transaction Loss, before Tax	3	$ 4
Cash Flow Hedging [Member] \| Foreign Exchange Forward [Member]
Summary of Derivative Instruments Gains (Losses) [Abstract]
Derivative gain recognized in OCI (effective portion)	9	16
Interest Expense [Member] \| Fair Value Hedging [Member] \| Interest Rate Contract [Member]
Summary of Derivative Instruments Gains (Losses) [Abstract]
Derivative (loss) gain recognized in interest expense	(1)	8
Hedged item gain (loss) recognized in interest expense	1	(8)
Cost of Sales [Member] \| Cash Flow Hedging [Member] \| Foreign Exchange Forward [Member]
Summary of Derivative Instruments Gains (Losses) [Abstract]
Derivative loss reclassified from AOCL to income - Cost of sales (effective portion)	(4)	(1)
Derivative loss reclassified from AOCL to income - Cost of Sales (ineffective)	0	0
Underlying, Derivative	0	0
Foreign Currency Gain (Loss) [Member] \| Foreign Exchange Forward [Member] \| Derivatives Not Designated as Hedging Instruments [Member]
Summary of Derivative Instruments Gains (Losses) [Abstract]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	$ 4	$ 71

Fair Value of Financial Assets and Liabilities - Recurring (Details) - Fair Value, Measurements, Recurring [Member] - Significant Other Observable Inputs (Level 2) [Member] - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Assets:
Interest rate swaps	$ 3	$ 4
Deferred compensation investments in mutual funds	16	15
Total	51	107
Liabilities:
Deferred compensation plan liabilities	18	17
Total	42	56
Foreign Exchange Forward [Member]
Assets:
Foreign exchange contracts	32	88
Liabilities:
Foreign derivative contracts	$ 24	$ 39

Fair Value of Financial Assets and Liabilities - Nonrecurring (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	$ 1,045	$ 2,223
Accounts receivable, net	985	961
Short-term debt	13	1,011
Long-term debt	4,988	5,305
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	1,045	2,223
Accounts receivable, net	985	961
Short-term debt	13	1,015
Long-term debt	$ 5,151	$ 5,438

Earnings per Share - Anti Dilutive Securities (Details) - $ / shares shares in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities (in shares)	42,715	47,788
Dividends per common share (in dollars per share)	$ 0.0625	$ 0.0775
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities (in shares)	0	2,104
Restricted Stock and Performance Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities (in shares)	15,749	18,718
Convertible preferred stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities (in shares)	26,966	26,966

Contingencies and Litigation (Details) $ in Millions	May 09, 2014	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Loss Contingencies [Line Items]
Loss Contingency, Damages Sought, Multiplier Of Overpayment Amounts	2
Brazil Tax And Labor Contingencies [Member]
Loss Contingencies [Line Items]
Unreserved tax and labor contingencies		$ 640	$ 750
Escrow cash deposits		87
Letters of Credit Outstanding, Amount		152
Surety Bonds Outstanding, Amount		$ 98

Contingencies and Litigation - Other Contingencies (Details) $ in Millions	Mar. 31, 2017 USD ($)
Performance Guarantee [Member]
Guarantor Obligations [Line Items]
Maximum exposure, undiscounted	$ 398