0001770450-20-000012 | 10-K | XBRL Viewer

$ 9,066

$ 9,662

$ 9,991

Research, development and engineering expenses

Cost of financing

131

132

133

373

397

424

Selling, administrative and general expenses

2,085

2,379

2,514

Restructuring and related costs

229

157

216

Amortization of intangible assets

Transaction and related costs, net

Other expenses, net

271

330

Total Costs and Expenses

8,244

9,113

9,466

Income before Income Taxes and Equity Income

822

549

525

Income tax expense

179

247

468

Equity in net income of unconsolidated affiliates

Income from Continuing Operations

651

310

Income from discontinued operations, net of tax

710

137

Less: Income from continuing operations attributable to noncontrolling interests

1,361

374

207

Less: Income from discontinued operations attributable to noncontrolling interests

Income from continuing operations

1,353

361

195

648

306

Income from discontinued operations

$ 705

$ 55

$ 129

Basic Earnings per Share:

Continuing operations (in dollars per share)

$ 2.86

$ 1.17

$ 0.20

Discontinued operations (in dollars per share)

3.17

0.23

0.51

Total Basic Earnings per Share

6.03

1.40

0.71

Diluted Earnings per Share:

Continuing operations (in dollars per share)

2.78

1.16

0.20

Discontinued operations (in dollars per share)

3.02

0.22

0.51

Diluted Earnings per Share

$ 5.80

$ 1.38

$ 0.71

Revenues

^[1]

$ 3,227

$ 3,454

$ 3,412

Services, maintenance and rentals

^[1]

2,097

2,188

2,133

Revenues

^[1]

5,595

5,940

6,285

^[1]

3,188

3,473

3,654

Financing

Revenues

244

268

294

Xerox Corporation

Revenues

9,066

9,662

9,991

Research, development and engineering expenses

Cost of financing

131

132

133

373

397

424

Selling, administrative and general expenses

2,085

2,379

2,514

Restructuring and related costs

229

157

216

Amortization of intangible assets

Transaction and related costs, net

Other expenses, net

271

330

Total Costs and Expenses

8,244

9,113

9,466

Income before Income Taxes and Equity Income

822

549

525

Income tax expense

179

247

468

Equity in net income of unconsolidated affiliates

Income from Continuing Operations

651

310

Income from discontinued operations, net of tax

710

137

Less: Income from continuing operations attributable to noncontrolling interests

1,361

374

207

Less: Income from discontinued operations attributable to noncontrolling interests

Income from continuing operations

1,353

361

195

648

306

Income from discontinued operations

705

129

Xerox Corporation | Sales

Revenues

^[2]

3,227

3,454

3,412

Xerox Corporation | Services, maintenance and rentals

^[2]

2,097

2,188

2,133

Revenues

^[2]

5,595

5,940

6,285

Xerox Corporation | Financing

^[2]

3,188

3,473

3,654

Revenues

Supplemental Financial Information [Abstract]

$ 244

$ 268

$ 294

[1]	Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information.
[2]	Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information.

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash Flows from Operating Activities
Net income	$ 1,361	$ 374	$ 207
Income from discontinued operations, net of tax	(710)	(64)	(137)
Income from continuing operations	651	310	70
Adjustments required to reconcile Net income to Cash flows from operating activities
Depreciation and amortization	430	526	527
Provisions	73	70	73
Deferred tax expense	124	135	399
Net gain on sales of businesses and assets	(21)	(35)	(15)
Stock-based compensation	50	57	52
Restructuring and asset impairment charges	127	156	197
Payments for restructurings	(93)	(169)	(220)
Defined benefit pension cost	109	175	194
Contributions to defined benefit pension plans	(141)	(144)	(836)
Decrease (increase) in accounts receivable and billed portion of finance receivables	10	31	(531)
Decrease (increase) in inventories	109	17	(73)
Increase in equipment on operating leases	(153)	(248)	(217)
Decrease in finance receivables	101	166	162
(Increase) decrease in other current and long-term assets	(14)	29	(20)
(Decrease) increase in accounts payable	(47)	1	1
Decrease in accrued compensation	(94)	(111)	(28)
Increase (decrease) in other current and long-term liabilities	40	52	(79)
Net change in income tax assets and liabilities	(34)	41	11
Net change in derivative assets and liabilities	11	(14)	75
Other operating, net	6	37	9
Net cash provided by (used in) operating activities of continuing operations	1,244	1,082	(249)
Net cash provided by (used in) operating activities of discontinued operations	89	58	(18)
Net cash provided by (used in) operating activities	1,333	1,140	(267)
Cash Flows from Investing Activities
Cost of additions to land, buildings, equipment and software	(65)	(90)	(105)
Proceeds from sales of businesses and assets	21	59	23
Acquisitions, net of cash acquired	(42)	0	(87)
Collections of deferred proceeds from sales of receivables	0	0	213
Collections on beneficial interest from sales of finance receivables	0	0	21
Other investing, net	1	2	100
Net cash (used in) provided by investing activities of continuing operations	(85)	(29)	165
Net cash provided by investing activities of discontinued operations	2,233	0	0
Net cash provided by (used in) investing activities	2,148	(29)	165
Cash Flows from Financing Activities
Net (payments) proceeds on short-term debt	0	(5)	2
Proceeds from issuance of long-term debt	10	9	1,008
Payments on long-term debt	(960)	(311)	(1,832)
Dividends	(243)	(269)	(291)
Payments to acquire treasury stock, including fees	(600)	(700)	0
Other financing, net	(41)	(25)	128
Net cash used in financing activities	(1,834)	(1,301)	(985)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	0	(30)	53
Increase (decrease) in cash, cash equivalents and restricted cash	1,647	(220)	(1,034)
Cash, cash equivalents and restricted cash at beginning of year	1,148	1,368	2,402
Cash, Cash Equivalents and Restricted Cash at End of Year	2,795	1,148	1,368
Xerox Corporation
Cash Flows from Operating Activities
Net income	1,361	374	207
Income from discontinued operations, net of tax	(710)	(64)	(137)
Income from continuing operations	651	310	70
Adjustments required to reconcile Net income to Cash flows from operating activities
Depreciation and amortization	430	526	527
Provisions	73	70	73
Deferred tax expense	124	135	399
Net gain on sales of businesses and assets	(21)	(35)	(15)
Stock-based compensation	50	57	52
Restructuring and asset impairment charges	127	156	197
Payments for restructurings	(93)	(169)	(220)
Defined benefit pension cost	109	175	194
Contributions to defined benefit pension plans	(141)	(144)	(836)
Decrease (increase) in accounts receivable and billed portion of finance receivables	10	31	(531)
Decrease (increase) in inventories	109	17	(73)
Increase in equipment on operating leases	(153)	(248)	(217)
Decrease in finance receivables	101	166	162
(Increase) decrease in other current and long-term assets	(14)	29	(20)
(Decrease) increase in accounts payable	(47)	1	1
Decrease in accrued compensation	(94)	(111)	(28)
Increase (decrease) in other current and long-term liabilities	40	52	(79)
Net change in income tax assets and liabilities	(34)	41	11
Net change in derivative assets and liabilities	11	(14)	75
Other operating, net	6	37	9
Net cash provided by (used in) operating activities of continuing operations	1,244	1,082	(249)
Net cash provided by (used in) operating activities of discontinued operations	89	58	(18)
Net cash provided by (used in) operating activities	1,333	1,140	(267)
Cash Flows from Investing Activities
Cost of additions to land, buildings, equipment and software	(65)	(90)	(105)
Proceeds from sales of businesses and assets	21	59	23
Acquisitions, net of cash acquired	(42)	0	(87)
Collections of deferred proceeds from sales of receivables	0	0	213
Collections on beneficial interest from sales of finance receivables	0	0	21
Other investing, net	1	2	100
Net cash (used in) provided by investing activities of continuing operations	(85)	(29)	165
Net cash provided by investing activities of discontinued operations	2,233	0	0
Net cash provided by (used in) investing activities	2,148	(29)	165
Cash Flows from Financing Activities
Net (payments) proceeds on short-term debt	0	(5)	2
Proceeds from issuance of long-term debt	10	9	1,008
Payments on long-term debt	(960)	(311)	(1,832)
Dividends	(181)	(269)	(291)
Payments to acquire treasury stock, including fees	(300)	(700)	0
Distributions to parent	(373)	0	0
Other financing, net	(30)	(25)	128
Net cash used in financing activities	(1,834)	(1,301)	(985)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	0	(30)	53
Increase (decrease) in cash, cash equivalents and restricted cash	1,647	(220)	(1,034)
Cash, cash equivalents and restricted cash at beginning of year	1,148	1,368	2,402
Cash, Cash Equivalents and Restricted Cash at End of Year	$ 2,795	$ 1,148	$ 1,368

Supplementary Financial Information (Tables)

12 Months Ended

Dec. 31, 2019

Other assets and liabilities

The components of Other assets and liabilities were as follows:



	December 31,
	2019		2018
Other Current Assets
Income taxes receivable	$	27	$	14
Royalties, license fees and software maintenance	25		20
Restricted cash	—		1
Prepaid expenses	29		31
Derivative instruments	2		15
Advances and deposits	30		28
Other	88		82
Total Other Current Assets	$	201	$	191
Other Long-term Assets
Income taxes receivable	$	9	$	8
Prepaid pension costs	451		281
Derivative instruments	1		—
Internal use software, net	122		154
Restricted cash	55		63
Debt issuance costs, net	3		4
Customer contract costs, net	176		184
Operating lease right-of-use asset⁽¹⁾	319		—
Deferred compensation plan investments	19		16
Investments in affiliates, at equity⁽²⁾	46		43
Other	137		149
Total Other Long-term Assets	$	1,338	$	902
Accrued Expenses and Other Current Liabilities
Income taxes payable	$	7	$	33
Other taxes payable	79		77
Operating lease obligation⁽¹⁾	87		—
Financing lease obligation⁽¹⁾	2		—
Interest payable	38		41
Restructuring reserves	70		93
Restructuring related costs	37		—
Derivative instruments	8		1
Product warranties	6		5
Dividends payable	66		69
Distributor and reseller rebates/commissions	167		158
Unearned income and other revenue deferrals	158		155
Other	259		216
Total Accrued Expenses and Other Current Liabilities	$	984	$	848
Other Long-term Liabilities
Deferred taxes	$	37	$	51
Income taxes payable	64		18
Operating lease obligation⁽¹⁾	260		—
Finance lease obligation⁽¹⁾	5		—
Environmental reserves	9		9
Restructuring reserves	—		2
Other	137		189
Total Other Long-term Liabilities	$	512	$	269

_____________


(1)	2019 amounts relate to the adoption of ASC 842, Leases effective January 1, 2019. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 2 - Adoption of New Leasing Standard - Lessee for additional information.

(2)

Refer to Note 12 - Investments in Affiliates, at Equity for additional information.

Schedule of restricted cash

Restricted cash amounts were as follows:



	December 31,
	2019		2018
Cash and cash equivalents	$	2,740	$	1,081
Restricted cash
Litigation deposits in Brazil	55		61
Other restricted cash	—		3
Total Restricted Cash	55		64
Cash, cash equivalents and restricted cash of continuing operations	2,795		1,145
Cash, cash equivalents and restricted cash of discontinued operations	—		3
Cash, cash equivalents and restricted cash	$	2,795	$	1,148

Restricted cash balance sheet location

Restricted cash was reported in the Consolidated Balance Sheets as follows:



	December 31,
	2019		2018
Other current assets	$	—	$	1
Other long-term assets	55		63
Total Restricted cash	$	55	$	64

Pension and other benefit liabilities

Pension and Other Benefit Liabilities



	December 31,
	2019		2018
Pension liabilities⁽¹⁾	$	1,616	$	1,386
Accrued compensation liabilities	69		73
Deferred compensation liabilities⁽²⁾	22		23
Pension and other benefit liabilities	$	1,707	$	1,482

__________________________


(1)	Refer to Note 19 - Employee Benefit Plans for additional information regarding pension liabilities.

(2)

As of December 31, 2019 and 2018, includes amounts measured at fair value on a recurring basis of $18 and $16, respectively, and amounts for executive deferred compensation of $4 and $7, respectively. Refer to Note 18 - Fair Value of Financial Assets and Liabilities for additional information regarding deferred compensation liabilities.

Summarized cash flow information

Summarized cash flow information is as follows:



	Year Ended December 31,
	2019		2018		2017
Provision for receivables	$	49	$	40	$	46
Provision for inventory	24		30		27
Provision for product warranty	12		14		15
Depreciation of buildings and equipment	101		148		136
Depreciation and obsolescence of equipment on operating leases	225		249		265
Amortization of internal use software	59		81		65
Amortization of product software	—		—		4
Amortization of acquired intangible assets	45		48		53
Amortization of customer contract costs⁽¹⁾	93		100		4
Cost of additions to land, buildings and equipment	41		55		69
Cost of additions to internal use software	24		35		36
Common stock dividends - Xerox Holdings	229		255		274
Preferred stock dividends - Xerox Holdings	14		14		17
Payments to noncontrolling interests	14		17		18
Repurchases related to stock-based compensation - Xerox Holdings	28		9		15

__________________________

(1)

Amortization of customer contract costs for the years ended December 31, 2019 and 2018 is reported in (Increase) decrease in other current and long-term assets on the Consolidated Statements of Cash Flows. Refer to Note 4 - Revenue - Contract Costs for additional information.

Revenue - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract liabilities	$ 137	$ 116
Contract liability amortization period (years)	30 months
Deferred incremental direct costs, amortization period (years)	4 years
Customer contract costs, net	$ 163	172
Amortization period of incremental direct costs of obtaining a contract (years)	4 years
Contract Fulfillment Costs and Inducements
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Capitalized contract costs, deferred	$ 13	12
Amortization of capitalized contract fulfillment and inducement costs	$ 5	$ 5

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Entity Information [Line Items]

Basis of Presentation and Summary of Significant Accounting Policies

References to “Xerox Holdings” refer to Xerox Holdings Corporation and its consolidated subsidiaries while references to “Xerox” refer to Xerox Corporation and its consolidated subsidiaries. References herein to “we,” “us,” “our,” the “Company” refer collectively to both Xerox Holdings and Xerox unless the context suggests otherwise.

The accompanying Consolidated Financial Statements and footnotes represent the respective consolidated results and financial results of Xerox Holdings and Xerox and all respective companies that each registrant directly or indirectly controls, either through majority ownership or otherwise. This is a combined report of Xerox Holdings and Xerox, which includes separate Consolidated Financial Statements for each registrant.

The accompanying Consolidated Financial Statements of both Xerox Holdings and Xerox have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

Notes to the Consolidated Financial Statements reflect the activity for both Xerox Holdings and Xerox for all periods presented, unless otherwise noted.

Corporate Reorganization

On March 6, 2019, the Xerox Board of Directors approved a reorganization (the “Reorganization”) of the Company's corporate structure into a holding company structure. The Reorganization was subject to the approval of shareholders, which was obtained at the annual shareholders meeting held May 21, 2019.

On July 31, 2019, Xerox completed the Reorganization, pursuant to which Xerox (the predecessor publicly held parent company) became a direct, wholly-owned subsidiary of Xerox Holdings, the successor public company. The business operations, directors and executive officers of the Company did not change as a result of the Reorganization.

In this Reorganization, shareholders of Xerox became shareholders of Xerox Holdings on a one-for-one basis; maintaining the same number of shares and ownership percentage as held in Xerox immediately prior to the Reorganization. In addition, the individual holder of the shares of Xerox’s Series B Preferred Stock exchanged those shares for the same number of shares of Xerox Holdings Series A Preferred Stock. Each share of Xerox Holdings Series A Preferred Stock has the same designations, rights, powers and preferences, and the same qualifications, limitations and restrictions as the shares of Xerox Series B Preferred Stock, with the addition of certain voting rights (Refer to Note 22 - Preferred Stock for additional information regarding the Xerox Holdings Series A Preferred Stock). In connection with the Reorganization, Xerox Holdings assumed each of the Xerox stock plans, all unexercised and unexpired options to purchase Xerox common stock and each right to acquire or vest in a share of Xerox common stock, including restricted stock unit awards, performance share awards and deferred stock units that are outstanding under the Xerox stock plans. In addition, Xerox Holdings became a guarantor of Xerox’s existing Credit Facility.

The Reorganization was accounted for as a transaction among entities under common control and is expected to be a tax-free transaction for U.S. federal income tax purposes. Shares of Xerox Holdings common stock trade on the New York Stock Exchange under the ticker symbol “XRX”, formerly used by Xerox.

Subsequent to the Reorganization, Xerox Holdings contributed the Xerox Series B Preferred Stock it held to Xerox in exchange for additional capital and Xerox subsequently extinguished the Series B Preferred Stock. The contribution and extinguishment were recorded at carrying value (Refer to Note 22 - Preferred Stock for additional information). In addition, the capital structure of Xerox was modified such that its issued and outstanding common shares now held by Xerox Holdings were exchanged for 100 shares of Xerox $1 par value common stock. Accordingly, we reclassified approximately $221 from Xerox’s Common stock to Additional paid-in capital.

Description of Business

Currently, Xerox Holdings' sole direct operating subsidiary is Xerox and therefore Xerox reflects the entirety of Xerox Holdings' operations. Xerox is a global enterprise for document management solutions. We provide advanced document technology, services, software and genuine Xerox supplies for a range of customers including small and mid-size businesses, large enterprises, governments and graphic communications providers, and for our partners who serve them. We operate in approximately 160 countries worldwide.

Basis of Consolidation

The Consolidated Financial Statements include the accounts of Xerox Corporation and all of our controlled subsidiary companies. All significant intercompany accounts and transactions have been eliminated. Investments in business entities in which we do not have control, but we have the ability to exercise significant influence over operating and financial policies (generally 20% to 50% ownership) are accounted for using the equity method of accounting. Operating results of acquired businesses are included in the Consolidated Statements of Income from the date of acquisition.

We consolidate variable interest entities if we are deemed to be the primary beneficiary of the entity. Operating results for variable interest entities in which we are determined to be the primary beneficiary are included in the Consolidated Statements of Income from the date such determination is made.

For convenience and ease of reference, we refer to the financial statement caption “Income before Income Taxes and Equity Income” as “pre-tax income” throughout the Notes to the Consolidated Financial Statements.

Discontinued Operations

In November 2019, Xerox Holdings completed a series of transactions to restructure its relationship with FUJIFILM Holdings Corporation (“FH”), including the sale of its indirect 25% equity interest in Fuji Xerox (FX) as well as the sale of its indirect 51% partnership interest in Xerox International Partners (XIP) (collectively the “Sales”). As a result of the Sales of FX and XIP and the related strategic shift in our business the historical financial results of our equity method investment in FX and our XIP business (which was consolidated) for the periods prior to the Sales are reflected as a discontinued operation and as such, their impact is excluded from continuing operations for all periods presented. The accompanying Notes to the Consolidated Financial Statements have all been revised to reflect the effect of the Sales and all prior year balances have been revised accordingly to reflect continuing operations only. The historical statements of Comprehensive Income and Shareholders' Equity have not been revised to reflect the Sales and instead reflect the Sales as an adjustment to the balances at December 31, 2019. Refer to Note 7 - Divestitures for additional information regarding discontinued operations and other divestitures.

Prior Period Adjustments

In 2018, we determined that the Projected Benefit Obligation (PBO) for our UK funded pension plan at December 31, 2017 was overstated by approximately GBP 40 million (approximately USD $53 or $43 after-tax). The error was the result of the plan administrator under-reporting benefit payments. The correction of the PBO was recorded as an out-of-period adjustment in 2018 with the offset to the balance sheet recorded as a credit to Changes in defined benefit plans, net in Other comprehensive income for the period. We assessed the impact of this error and concluded that it was not material to the financial statements previously issued for any interim or annual period and the correction was not material to the annual financial statements for 2018.

Change in Presentation

During first quarter 2019, we realigned portions of our business to support our new revenue strategy. This realignment included the combination and consolidation of certain sales units to better service customers consistently across the company. In connection with that realignment, we changed the classification of revenues and related costs from certain service arrangements to consistently conform the presentation of those amounts among our various business units. Prior year amounts were also revised as follows to conform to the 2019 presentation.



	Year Ended December 31, 2018
	As Reported⁽¹⁾		Change			As Revised
Sales	$	3,805	$	(351	)	$	3,454
Services, maintenance and rentals	5,589		351			5,940

Cost of sales	$	2,305	$	(117	)	$	2,188
Cost of services, maintenance and rentals	3,356		117			3,473



	Year Ended December 31, 2017
	As Reported⁽¹⁾		Change			As Revised
Sales	$	3,801	$	(389	)	$	3,412
Services, maintenance and rentals	5,896		389			6,285

Cost of sales	$	2,273	$	(140	)	$	2,133
Cost of services, maintenance and rentals	3,514		140			3,654

_____________


(1)	As reported amounts have been restated to reflect the sale of our investment of XIP. Refer to Note 7 - Divestitures for additional information.

The revised presentation does not impact Total Revenues, Total Costs and Expenses or Net Income.

Use of Estimates

The preparation of our Consolidated Financial Statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our Consolidated Financial Statements will change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. Our estimates are based on management's best available information including current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates.

Changes in Estimates

In the ordinary course of accounting for the items discussed above, we make changes in estimates as appropriate and as we become aware of new or revised circumstances surrounding those estimates. Such changes and refinements in estimation methodologies are reflected in reported results of operations in the period in which the changes are made and, if material, their effects are disclosed in the Notes to the Consolidated Financial Statements and in Management's Discussion and Analysis of Financial Condition and Results of Operations.

New Accounting Standards and Accounting Changes

Except for the Accounting Standard Updates (ASUs) discussed below, the new ASUs issued by the FASB during the last two years did not have any significant impact on the Company.

Accounting Standard Updates to be Adopted:

Financial Instruments - Credit Losses and Derivatives

In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses - Measurement of Credit Losses on Financial Instruments, with additional amendments being issued in 2018 and 2019. This update requires measurement and recognition of expected credit losses for financial assets on an expected loss model rather than an incurred loss model. The update impacts financial assets including net investment in leases that are not accounted for at fair value through Net Income. This update is effective for our fiscal year beginning January 1, 2020. The impact of the adoption of ASU 2016-13 is expected to primarily impact the estimation of our Allowance for doubtful accounts for Accounts Receivables and Finance Receivables. We currently do not expect the new guidance to have a material impact on our financial condition, results of operations or cash flows since we already apply an expected loss model in the estimation of our Allowance for doubtful accounts for Accounts Receivables and Finance Receivables and currently include assessment of current economic conditions. However, the full impact of this standard will be dependent on future economic conditions.

Intangibles - Internal-Use Software

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The update provides criteria for determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The capitalized implementation costs are required to be expensed over the term of the hosting arrangement. The update also clarifies the presentation requirements for reporting such costs in the entity’s financial statements. This update is effective for our fiscal year beginning January 1, 2020. Since we currently capitalize these implementation costs and such amounts are not material, we do not expect the new guidance to have a material impact on our financial condition, results of operations or cash flows.

Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This update is effective for our fiscal year beginning January 1, 2021. We are currently in the process of evaluating the effects of this pronouncement on our consolidated financial statements.

Accounting Standard Updates Recently Adopted:

Leases

On January 1, 2019, we adopted ASU 2016-02, Leases (ASC Topic 842). This update, as well as additional amendments and targeted improvements issued in 2018 and early 2019, supersedes existing lease accounting guidance found under ASC 840, Leases (“ASC 840”) and requires the recognition of right-to-use assets and lease obligations by lessees for those leases originally classified as operating leases under prior lease guidance. Effective with the adoption, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. Short-term leases with a term of 12 months or less are not required to be recognized. The update also requires qualitative and quantitative disclosure of key information regarding the amount, timing and uncertainty of cash flows arising from leasing arrangements to increase transparency and comparability among companies. The accounting for lessors does not fundamentally change with this update except for changes to conform and align guidance to the lessee guidance, as well as to the revenue recognition guidance in ASU 2014-09. Some of these conforming changes, such as those related to the definition of lease term and minimum lease payments, resulted in certain lease arrangements, that would have been previously accounted for as operating leases, to be classified and accounted for as sales-type leases with a corresponding up-front recognition of equipment sales revenue.

Upon adoption, we applied the transition option, whereby prior comparative periods are not retrospectively presented in the Consolidated Financial Statements. We also elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components for certain asset classes (real estate lease arrangements for offices and warehouses). Additionally, we made a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes. We elected the package of practical expedients from both the Lessee and Lessor prospective, to the extent applicable.

Lessee accounting - the adoption of this update resulted in an increase to assets and related liabilities of approximately $385 (approximately $440 undiscounted) primarily related to leases of facilities. Refer to Note 2 - Adoption of New Leasing Standard - Lessee for additional information related to our lessee accounting.

Lessor accounting - the adoption of this update resulted in an increase to equipment sales by approximately $30 in 2019 as compared to 2018. Refer to Note 3 - Adoption of New Leasing Standard - Lessor for additional information related to our lessor accounting.

Financial Instruments - Derivatives

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, with additional updates and amendments being issued in 2018 and 2019. The amendments in this update expand and refine hedge accounting for both financial and non-financial risk components, align the recognition and presentation of the effects of hedging instruments with the same income statement line item that the hedged item is reported and include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. We adopted ASU 2017-12 effective for our fiscal year beginning January 1, 2019, and it did not have a material impact on our financial condition, results of operations or cash flows.

Income Taxes

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. We adopted ASU 2018-02 effective for our fiscal year beginning January 1, 2019 and upon adoption reclassified $127 from Accumulated other comprehensive loss (AOCL) to Retained earnings related to the stranded tax effects resulting from the Tax Cuts and Jobs Act (Tax Act) enacted in December 2017. The reclassification was primarily related to the stranded tax effects associated with amounts in AOCL from our retirement-related benefit plans. Accordingly, the adoption of this update eliminated the stranded tax effects resulting from the Tax Act. However, because the update only relates to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in Income from continuing operations is not affected.

Revenue Recognition

On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (ASC Topic 606), which superseded nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASC Topic 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC Topic 606 defines a five-step process to recognize revenue and requires more judgment and estimates within the revenue recognition process than required under previous U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of

variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.

We adopted this standard using the modified retrospective method of adoption and therefore we did not revise periods prior to adoption (e.g. 2017). Under ASC Topic 606, based on the nature of our contracts and consistent with prior practice, we recognize revenue upon invoicing the customer for the large majority of our revenue. Additionally, the unit of accounting, that is, the identification of performance obligations, is consistent with prior revenue recognition practice. Accordingly, the adoption of this standard did not have a material impact for the large majority of our revenues. A significant portion of our Equipment sales are either recorded as sales-type leases or through direct sales to distributors and resellers and these revenue streams are not impacted by the adoption of ASC Topic 606. The only change of significance identified in our adoption involves a change in the classification of certain revenues that were previously reported in Services revenues. These revenues relate to certain analyst services performed in connection with the installation of equipment that are being considered part of the equipment sale performance obligation effective beginning January 1, 2018. Accordingly, these revenues are now reported as part of Sales. For the year ended December 31, 2017, we reported $44 as Services, which would have been reported as Sales under the new standard.

Another change identified upon adoption was with respect to deferred contract costs, which include incremental costs of obtaining a contract and costs to fulfill a contract. Deferred contract costs had been minimal under our prior practices as most costs to obtain a contract and fulfill a contract were expensed as incurred. However, as a result of the contract cost guidance included in ASC Topic 606 and ASC Topic 340-40 "Contracts with Customers", upon adoption on January 1, 2018, we recorded a transition asset of $153, and a net of tax increase of $117 to Retained earnings, related to the incremental cost to obtain contracts. Substantially all of this adjustment is related to the deferral of sales commissions paid to sales people and agents in connection with the placement of equipment with post sale service arrangements. The impact to the Statement of Income from this change is not material.

Other Updates

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


•	Investments: ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). This update is effective for our fiscal year beginning January 1, 2021.


•	Compensation - Stock Compensation and Revenue from Contracts with Customers: ASU 2019-08, (Topic 718) and (Topic 606) Codification Improvements - Share-Based Consideration Payable to a Customer. This update is effective for our fiscal year beginning January 1, 2020.


•	Collaborative Arrangements: ASU 2018-18, (Topic 808) Clarifying the Interaction between Topic 808 and Topic 606. This update is effective for our fiscal year beginning January 1, 2020.


•	Compensation - Retirement Benefits - Defined Benefit Plans - General: ASU 2018-14, (Topic 715-20) Changes to the Disclosure Requirements for Defined Benefit Plans. We elected to early adopt this update effective for our fiscal year ended December 31, 2019. Refer to Note 19 - Employee Benefit Plans for changes in the disclosures for our Defined Benefit Plans.


•	Fair Value Measurement: ASU 2018-13, (Topic 820) Disclosure Framework. This update is effective for our fiscal year beginning January 1, 2020.

Summary of Accounting Policies

Revenue Recognition (Policies subsequent to the adoption of ASU 2014-09 - ASC Topic 606)

The revenue recognition policies that follow are applicable for the periods subsequent to the adoption of ASC Topic 606, which was adopted on a modified prospective basis effective January 1, 2018 - the years ended December 31, 2019 and 2018. Refer to the section Revenue Recognition (Policies prior to the adoption of ASU 2014-09 - ASC Topic 606) below, for the revenue recognition policies prior to the adoption of ASU Topic 606, which were applicable for the year ended December 31, 2017.

We generate revenue through the sale of equipment, supplies and maintenance and printing services. Revenue is measured based on consideration specified in a contract with a customer and is recognized when we satisfy a performance obligation by transferring control of a product to a customer or in the period the customer benefits from the service. With the exception of our sales-type lease arrangements, our invoices to the customer, which normally have short-term payment terms, are typically aligned to the transfer of goods or as services are rendered to our customers

and therefore in most cases we recognize revenue based on our right to invoice customers. As a result of the application of this practical expedient for the substantial portion of our revenue, the disclosure of the value of unsatisfied performance obligations for our services is not required.

Significant judgments primarily include the identification of performance obligations in our Document management services arrangements as well the pattern of delivery for those services.

More specifically, revenue related to our products and services is generally recognized as follows:

Equipment: Revenues from the sale of equipment directly to end customers, including those from sales-type leases (see below), are recognized when obligations under the terms of a contract with our customer are satisfied and control has been transferred to the customer. For equipment placements that require us to install the product at the customer location, revenue is normally recognized when the equipment has been delivered and installed at the customer location. Sales of customer installable products are recognized upon shipment or receipt by the customer according to the customer's shipping terms. Revenue from the equipment performance obligation also includes certain analyst training services performed in connection with the installation or delivery of the equipment.

Maintenance services: We provide maintenance agreements on our equipment that include service and supplies for which the customer may pay a base minimum plus a price-per-page charge for usage. In arrangements that include minimums, those minimums are normally set below the customer’s estimated page volumes and are not considered substantive. These agreements are sold as part of a bundled lease arrangement or through distributors and resellers. We normally account for these maintenance agreements as a single performance obligation for printing services being delivered in a series with delivery being measured by usage as billed to the customer. Accordingly, revenue on these agreements are normally recognized as billed to the customer over the term of the agreements based on page volumes. A substantial portion of our products are sold with full service maintenance agreements, accordingly, other than the product warranty obligations associated with certain of our entry level products, we do not have any significant warranty obligations, including any obligations under customer satisfaction programs.

Document management services: Revenues associated with our document management services are generally recognized as printing services are rendered, which is generally on the basis of the number of images produced. Revenues on unit-price contracts are recognized at the contractual selling prices as work is completed by the customer. We account for these arrangements as a single performance obligation for printing services being delivered in a series with delivery being measured by usage as billed to the customer.

Our services contracts may also include the sale or lease of equipment and software. In these instances, we follow the policies noted for Equipment or Software Revenues and separately report the revenue associated with these performance obligations. Certain document management services arrangements may also include an embedded lease of equipment. In these instances, the revenues associated with the lease are recognized in accordance with the requirements for lease accounting.

Sales to distributors and resellers: We utilize distributors and resellers to sell our equipment, supplies and maintenance services to end-user customers. We refer to our distributor and reseller network as our two-tier distribution model. Revenues on sales to distributors and resellers are generally recognized when products are shipped to such distributors and resellers. However, revenue is only recognized when the distributor or reseller has economic substance apart from the Company such that collectability is probable and we have no further obligations related to bringing about the resale, delivery or installation of the product that would impact transfer of control. Revenues associated with maintenance agreements sold through distributors and resellers to end customers are recognized in a consistent manner to maintenance services. Revenue that may be subject to a reversal of revenue due to contractual terms or uncertainties is not recorded as revenue until the contractual provisions lapse or the uncertainties are resolved.

Distributors and resellers participate in various rebate, price-protection, cooperative marketing and other programs, and we estimate the variable consideration associated with these programs and record those amounts as a reduction to revenue when the sales occur. Similarly, we account for our estimates of sales returns and other allowances when the sales occur based on our historical experience.

In certain instances, we may provide lease financing to end-user customers who purchased equipment we sold to distributors or resellers. We are not obligated to provide financing and we compete with other third-party leasing companies with respect to the lease financing provided to these end-user customers.

Supplies: Supplies revenue is recognized upon transfer of control to the customer, generally upon utilization or shipment to the customer in accordance with the sales contract terms.

Financing: Finance income attributable to sales-type leases, direct financing leases and installment loans is recognized on the accrual basis using the effective interest method.

Bundled Lease Arrangements: A significant portion of our direct sales of equipment to end customers are made through bundled lease arrangements that typically include equipment, maintenance and financing components for which the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of contractual page volume minimums, which are often expressed in terms of price-per-page. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed minimum payments that the customer is obligated to make (fixed payments) over the lease term. In applying our lease accounting methodology, we only consider the fixed payments for purposes of allocating to the relative fair value elements of the contract.

Revenues under bundled arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment, financing, maintenance and other executory costs, while non-lease deliverables generally consist of the supplies and non-maintenance services. The allocation for the lease deliverables begins by allocating revenues to the maintenance and other executory costs plus a profit thereon. These elements are generally recognized over the term of the lease as service revenue. The remaining amounts are allocated to the equipment and financing elements, which are subjected to the accounting estimates noted below under “Leases”.

Leases: The two primary lease accounting provisions we assess for the classification of transactions as sales-type or operating leases are: (1) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the equipment and (2) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized as noted above for Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease.

We consider the economic life of most of our products to be five years, since this represents the most frequent contractual lease term for our principal products and only a small percentage of our leases are for original terms longer than five years. There is no significant after-market for our used equipment. We believe five years is representative of the period during which the equipment is expected to be economically usable, with normal service, for the purpose for which it is intended. Residual values are not significant.

With respect to fair value, we perform an analysis of equipment fair value based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices are indicative of fair value.

Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. These interest rates have generally been adjusted if the rates vary by 25 basis points or more, cumulatively, from the rate last in effect. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices.

Note: The above two revenue recognition policies apply to 2018 and were updated as a result of our adoption of ASC Topic 842 effective January 1, 2019. Refer to Note 3 - Adoption of New Leasing Standard - Lessor for the updated policies.

Other Revenue Recognition Policies

Revenue-based Taxes: Revenue-based taxes assessed by governmental authorities that are both imposed on and concurrent with specific revenue-producing transactions, and that are collected by the Company from a customer, are excluded from revenue. The primary revenue-based taxes are sales tax and value-added tax (VAT).

Shipping and Handling: Shipping and handling costs are accounted for as a fulfillment cost and are included in Cost of sales in the Consolidated Statements of Income.

Refer to Note 4 - Revenue for additional information regarding revenue recognition policies with respect to contract assets and liabilities as well as contract costs.

Revenue Recognition (Policies prior to the adoption of ASU 2014-09 - ASC Topic 606)

We generate revenue through services, the sale and rental of equipment, supplies and income associated with the financing of our equipment sales. Revenue is recognized when it is realized or realizable and earned. We consider revenue realized or realizable and earned when we have persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. Delivery does not occur until equipment has been shipped or services have been provided to the customer, risk of loss has transferred to the customer, and either customer acceptance has been obtained, customer acceptance provisions have lapsed, or the company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied. The sales price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved. More specifically, revenue related to services and sales of our products is recognized as follows:

Equipment: Revenues from the sale of equipment, including those from sales-type leases, are recognized at the time of sale or at the inception of the lease, as appropriate. For equipment sales that require us to install the product at the customer location, revenue is recognized when the equipment has been delivered and installed at the customer location. Sales of customer installable products are recognized upon shipment or receipt by the customer according to the customer's shipping terms. Revenues from equipment under other leases and similar arrangements are accounted for by the operating lease method and are recognized as earned over the lease term, which is generally on a straight-line basis.

Maintenance Services: Maintenance service revenues are derived primarily from maintenance contracts on the equipment sold to our customers and are recognized over the term of the contracts. A substantial portion of our products are sold with full service maintenance agreements for which the customer typically pays a base service fee plus a variable amount based on usage. As a consequence, other than the product warranty obligations associated with certain of our low end products, we do not have any significant product warranty obligations, including any obligations under customer satisfaction programs.

Bundled Lease Arrangements: We sell our products and services under bundled lease arrangements, which typically include equipment, service, supplies and financing components for which the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of contractual page volume minimums, which are often expressed in terms of price-per-page. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed minimum payments that the customer is obligated to make (fixed payments) over the lease term. The payments associated with page volumes in excess of the minimums are contingent on whether or not such minimums are exceeded (contingent payments). In applying our lease accounting methodology, we only consider the fixed payments for purposes of allocating to the relative fair value elements of the contract. Contingent payments, if any, are recognized as revenue in the period when the customer exceeds the minimum copy volumes specified in the contract.

Revenues under bundled arrangements are allocated considering the relative selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment, financing, maintenance and other executory costs, while non-lease deliverables generally consist of the supplies and non-maintenance services. The allocation for the lease deliverables begins by allocating revenues to the maintenance and other executory costs plus a profit thereon. These elements are generally recognized over the term of the lease as service revenue. The remaining amounts are allocated to the equipment and financing elements which are subjected to the accounting estimates noted below under “Leases.”

Our pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. These interest rates have generally been adjusted if the rates vary by 25 basis points or more, cumulatively, from the rate last in effect. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices.

Sales to distributors and resellers: We utilize distributors and resellers to sell many of our technology products, supplies and services to end-user customers. We refer to our distributor and reseller network as our two-tier distribution model. Sales to distributors and resellers are generally recognized as revenue when products are sold to such distributors and resellers. However, revenue is only recognized when the distributor or reseller has economic substance apart from the company, the sales price is not contingent upon resale or payment by the end user customer and we have no further obligations related to bringing about the resale, delivery or installation of the product.

Distributors and resellers participate in various rebate, price-protection, cooperative marketing and other programs, and we record provisions for these programs as a reduction to revenue when the sales occur. Similarly, we account for our estimates of sales returns and other allowances when the sales occur based on our historical experience.

In certain instances, we may provide lease financing to end-user customers who purchased equipment we sold to distributors or resellers. We compete with other third-party leasing companies with respect to the lease financing provided to these end-user customers.

Supplies: Supplies revenue generally is recognized upon shipment or utilization by customers in accordance with the sales contract terms.

Software: Most of our equipment has both software and non-software components that function together to deliver the equipment's essential functionality and therefore they are accounted for together as part of equipment sales revenues. Software accessories sold in connection with our equipment sales, as well as free-standing software sales are accounted for as separate deliverables or elements. In most cases, these software products are sold as part of multiple element arrangements and include software maintenance agreements for the delivery of technical service, as well as unspecified upgrades or enhancements on a when-and-if-available basis. In those software accessory and free-standing software arrangements that include more than one element, we allocate the revenue among the elements based on vendor-specific objective evidence (VSOE) of fair value. Revenue allocated to software is normally recognized upon delivery while revenue allocated to the software maintenance element is recognized ratably over the term of the arrangement.

Leases: As noted above, equipment may be placed with customers under bundled lease arrangements. The two primary accounting provisions which we use to classify transactions as sales-type or operating leases are: (1) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the equipment and (2) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the equipment at the inception of the lease.

Financing: Finance income attributable to sales-type leases, direct financing leases and installment loans is recognized on the accrual basis using the effective interest method.

Services: Revenues associated with our document management services are generally recognized as services are rendered, which is generally on the basis of the number of transactions processed. In service arrangements where final acceptance of a printing solution by the customer is required, revenue is deferred until all acceptance criteria have been met. Revenues on unit-price contracts are recognized at the contractual selling prices as work is completed and accepted by the customer.

In connection with our services arrangements, we may incur and capitalize costs to originate these long-term contracts and to perform the migration, transition and setup activities necessary to enable us to perform under the terms of the arrangement. These capitalized costs are amortized over the contractual service period of the arrangement to cost of services. From time to time, we also provide inducements to customers in various forms, including contractual credits, which are capitalized and amortized as a reduction of revenue over the term of the contract.

Long-lived assets used in the fulfillment of service arrangements are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific.

Our services contracts may also include the sale of equipment and software. In these instances, we follow the policies noted above under Equipment-Related Revenues.

Other Revenue Recognition Policies

Multiple Element Arrangements: As described above, we enter into the following revenue arrangements that may consist of multiple deliverables:


•	Bundled lease arrangements, which typically include both lease deliverables and non-lease deliverables as described above.


•	Contracts for multiple types of document related services including professional and value-added services. For instance, we may contract for an implementation of a printing solution and also provide services to operate the solution over a period of time; or we may contract to scan, manage and store customer documents.

In substantially all of our multiple element arrangements, we are able to separate the deliverables since we normally will meet both of the following criteria:


•	The delivered item(s) has value to the customer on a stand-alone basis; and


•	If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control.

Consideration in a multiple-element arrangement is allocated at the inception of the arrangement to all deliverables on the basis of the relative selling price. When applying the relative selling price method, the selling price for each deliverable is primarily determined based on vendor-specific objective evidence (VSOE) or third-party evidence (TPE) of the selling price. The above noted revenue policies are then applied to each separated deliverable, as applicable.

Revenue-based Taxes: We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The primary revenue-based taxes are sales tax and value-added tax (VAT).

Shipping and Handling

Costs related to shipping and handling are recognized as incurred and included in Cost of sales in the Consolidated Statements of Income.

Other Significant Accounting Policies

Research, Development and Engineering (RD&E)

Research, development and engineering costs are expensed as incurred. Sustaining engineering costs are incurred with respect to on-going product improvements or environmental compliance after initial product launch. Sustaining engineering costs were $62, $72 and $90 in for the years ended December 31, 2019, 2018 and 2017, respectively.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, including money market funds, and investments with original maturities of three months or less.

Receivable Sales

We transfer certain portions of our receivable portfolios and normally account for those transfers as sales based on meeting the criteria for derecognition in accordance with ASC Topic 860 "Transfer and Servicing" of Financial Assets. Gains or losses on the sale of receivables depend, in part, on both (a) the cash proceeds and (b) the net non-cash proceeds received or paid. When we sell receivables, we normally receive beneficial interests in the transferred receivables from the purchasers as part of the proceeds. We may refer to these beneficial interests as a deferred purchase price. The beneficial interests obtained are initially measured at their fair value. We generally estimate fair value based on the present value of expected future cash flows, which are calculated using management's best estimates of the key assumptions including credit losses, prepayment rate and discount rates commensurate with the risks involved. Refer to Note 8 - Accounts Receivable, Net for additional information on our receivable sales.

Inventories

Inventories are carried at the lower of average cost or net realizable value. Inventories also include equipment that is returned at the end of the lease term. Returned equipment is recorded at the lower of remaining net book value or salvage value, which is normally not significant. We regularly review inventory quantities and record a provision for excess and/or obsolete inventory based primarily on our estimated forecast of product demand, production requirements and servicing commitments. Several factors may influence the realizability of our inventories, including our decision to exit a product line, technological changes and new product development. The provision for excess and/or obsolete raw materials and equipment inventories is based primarily on near term forecasts of product demand and include consideration of new product introductions, as well as changes in remanufacturing strategies. The provision for excess

and/or obsolete service parts inventory is based primarily on projected servicing requirements over the life of the related equipment populations. Refer to Note 10 - Inventories and Equipment on Operating Leases, Net for further discussion.

Land, Buildings and Equipment on Operating Leases

Land, buildings and equipment are recorded at cost. Buildings and equipment are depreciated over their estimated useful lives. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life. Equipment on operating leases is depreciated to estimated salvage value over the lease term. Depreciation is computed using the straight-line method. Significant improvements are capitalized and maintenance and repairs are expensed. Refer to Note 10 - Inventories and Equipment on Operating Leases, Net and Note 11 - Land, Buildings, Equipment and Software, Net for further discussion.

Leased Assets

We lease buildings and equipment, substantially all of which are accounted for as operating leases. Refer to Note 2 - Adoption of New Leasing Standard - Lessee for accounting policies with respect to leased assets and the adoption of ASC Topic 842.

Software - Internal Use and Product

We capitalize direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortize these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented (Internal Use Software). Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Amounts expended for Internal Use Software are included in Cash Flows from Investing.

We also capitalize certain costs related to the development of software solutions to be sold to our customers upon reaching technological feasibility (Product Software). These costs are amortized on a straight-line basis over the estimated economic life of the software. Amounts expended for Product Software are included in Cash Flows from Operations. We perform periodic reviews to ensure that unamortized Product Software costs remain recoverable from estimated future operating profits (net realizable value or NRV). Costs to support or service licensed software are charged to Costs of services as incurred. Refer to Note 11 - Land, Buildings, Equipment and Software, Net for further information.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of acquired net assets in a business combination, including the amount assigned to identifiable intangible assets. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the company and the acquired assembled workforce, neither of which qualifies as an identifiable intangible asset. Goodwill is not amortized, but rather is tested for impairment annually, or more frequently whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable and an impairment loss may have been incurred.

We normally assess goodwill for impairment at least annually, during the fourth quarter based on balances as of October 1^st, and more frequently if indicators of impairment exist or if a decision is made to sell or exit a business. Impairment testing for goodwill is done at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (a component) if the component constitutes a business for which discrete financial information is available, and segment management regularly reviews the operating results of that component. Consistent with the determination that we had one operating segment, we determined that there is one reporting unit and tested goodwill for impairment at the entity level.

We perform an assessment of goodwill, utilizing either a qualitative or quantitative impairment test. The qualitative impairment test assesses several factors to determine whether it is more likely than not that the fair value of the entity is less than its carrying amount. If we conclude it is more likely than not that the fair value of the entity is less than its carrying amount, a quantitative fair value test is performed. In certain circumstances, we may also bypass the qualitative test and proceed directly to a quantitative impairment test. In a quantitative impairment test, we assess goodwill by comparing the carrying amount of the entity to its fair value. Fair value of the entity is determined by using a weighted combination of an income approach and a market approach. If the fair value exceeds the carrying value, goodwill is not considered impaired. If the carrying value exceeds the fair value, goodwill is considered impaired and we would recognize an impairment loss for the excess.

Other intangible assets primarily consist of assets obtained in connection with business acquisitions, including installed customer base and distribution network relationships, existing technology, trademarks and non-compete agreements. We apply an impairment evaluation whenever events or changes in business circumstances indicate that the carrying value of our intangible assets may not be recoverable. Other intangible assets are amortized on a straight-line basis

over their estimated economic lives. We believe that the straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained annually by the Company. Refer to Note 13 - Goodwill and Intangible Assets, Net for further information.

Impairment of Long-Lived Assets

We review the recoverability of our long-lived assets, including buildings, equipment, right-of-use leased assets, internal use software and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. Long-lived assets to be disposed of by sale are reported at the lower of carrying amount or fair value less costs to sell. Long-lived assets to be disposed of other than by sale (e.g., by abandonment, cease-use) would continue to be classified as held and used until the long-lived asset is disposed of (e.g. abandoned or when asset ceases to be used).

Pension and Post-Retirement Benefit Obligations

We sponsor various forms of defined benefit pension plans in several countries covering employees who meet eligibility requirements. Retiree health benefit plans cover U.S. and Canadian employees for retiree medical costs. We employ a delayed recognition feature in measuring the costs of pension and post-retirement benefit plans. This requires changes in the benefit obligations and changes in the value of assets set aside to meet those obligations to be recognized not as they occur, but systematically and gradually over subsequent periods. All changes are ultimately recognized as components of net periodic benefit cost, except to the extent they may be offset by subsequent changes. At any point, changes that have been identified and quantified but not recognized as components of net periodic benefit cost are recognized in Accumulated other comprehensive loss, net of tax.

Several statistical and other factors that attempt to anticipate future events are used in calculating the expense, liability and asset values related to our pension and retiree health benefit plans. These factors include assumptions we make about the discount rate, expected return on plan assets, cash balance interest-crediting rate, rate of increase in healthcare costs, the rate of future compensation increases and mortality. Actual returns on plan assets are not immediately recognized in our income statement due to the delayed recognition requirement. In calculating the expected return on the plan asset component of our net periodic pension cost, we apply our estimate of the long-term rate of return on the plan assets that support our pension obligations, after deducting assets that are specifically allocated to Transitional Retirement Accounts (which are accounted for based on specific plan terms).

For purposes of determining the expected return on plan assets, we utilize a market-related value approach in determining the value of the pension plan assets, rather than a fair market value approach. The primary difference between the two methods relates to systematic recognition of changes in fair value over time (generally two years) versus immediate recognition of changes in fair value. Our expected rate of return on plan assets is applied to the market-related asset value to determine the amount of the expected return on plan assets to be used in the determination of the net periodic pension cost. The market-related value approach reduces the volatility in net periodic pension cost that would result from using the fair market value approach.

The discount rate is used to present value our future anticipated benefit obligations. The discount rate reflects the current rate at which benefit liabilities could be effectively settled considering the timing of expected payments for plan participants. In estimating our discount rate, we consider rates of return on high-quality fixed-income investments adjusted to eliminate the effects of call provisions, as well as the expected timing of pension and other benefit payments.

Each year, the difference between the actual return on plan assets and the expected return on plan assets, as well as increases or decreases in the benefit obligation as a result of changes in the discount rate and other actuarial assumptions, are added to or subtracted from any cumulative actuarial gain or loss from prior years. This amount is the net actuarial gain or loss recognized in Accumulated other comprehensive loss. We amortize net actuarial gains and losses as a component of net pension cost for a year if, as of the beginning of the year, that net gain or loss (excluding asset gains or losses that have not been recognized in market-related value) exceeds 10% of the greater of the projected benefit obligation or the market-related value of plan assets (the corridor method). This determination is made on a plan-by-plan basis. If amortization is required for a particular plan, we amortize the applicable net gain or loss in excess of the 10% threshold on a straight-line basis in net periodic pension cost over the remaining service period of the employees participating in that pension plan. In plans where substantially all participants are inactive, the amortization period for the excess is the average remaining life expectancy of the plan participants.

Our primary domestic plans allow participants the option of settling their vested benefits through the receipt of a lump-sum payment. The participant's vested benefit is considered fully settled upon payment of the lump sum. We have elected to apply settlement accounting and therefore we recognize the losses associated with settlements in this plan immediately upon the settlement of the vested benefits. Settlement accounting requires us to recognize a pro rata portion of the aggregate unamortized net actuarial losses upon settlement. The pro rata factor is computed as the percentage reduction in the projected benefit obligation due to the settlement of the participant's vested benefit. Refer to Note 19 - Employee Benefit Plans for further information regarding our Pension and Post-Retirement Benefit Obligations.

Foreign Currency Translation and Remeasurement

The functional currency for most of our foreign operations is the local currency. Net assets are translated at current rates of exchange and income, expense and cash flow items are translated at average exchange rates for the applicable period. The translation adjustments are recorded in Accumulated other comprehensive loss.

The U.S. Dollar is used as the functional currency for certain foreign subsidiaries that conduct their business in U.S. Dollars as well as foreign subsidiaries operating in highly inflationary economies. For these subsidiaries, non-monetary foreign currency assets and liabilities are translated using historical rates, while monetary assets and liabilities are translated at current rates, with the U.S. dollar effects of rate changes recorded in Currency (gains) and losses within Other expenses, net together with other foreign currency remeasurements.

Adoption of New Leasing Standard - Lessee - Operating Lease ROU Asset, Net and Operating Lease Liabilities (Details) $ in Millions	Dec. 31, 2019 USD ($)
Leases [Abstract]
Other long-term assets	$ 319
Accrued expenses and other current liabilities	87
Other long-term liabilities	260
Total Operating lease liabilities	$ 347

Divestitures - Narrative (Details)		1 Months Ended	3 Months Ended	12 Months Ended
Divestitures - Narrative (Details)	Aug. 01, 2017 USD ($)	Nov. 30, 2019 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jan. 01, 2017 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain (loss) reclassified from AOCL				$ 17,000,000	$ 0	$ 0
Goodwill			$ 3,778,000,000	3,900,000,000	3,858,000,000	$ 3,921,000,000
Cash distribution, Conduent to Xerox, prior to distribution date			$ 1,800,000,000
Short-term debt and current portion of long-term debt				$ 1,049,000,000	961,000,000
Conduent \| Unsecured Debt
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Short-term debt and current portion of long-term debt							$ 1,000,000,000.0
Naver
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sales price of disposal group or unit	$ 23,000,000
Gain (loss) on disposal	13,000,000
Gain on sale of business, net of tax	$ 4,000,000
Employees transferred in sale	80
Fuji Xerox Co., Ltd.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
License fee received		$ 77,000,000
Discontinued Operations, Disposed of by Sale \| Fuji Xerox Co., Ltd.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership percentage (percent)		25.00%
Proceeds from sale of equity method investments		$ 2,200,000,000
Goodwill		$ 0
Discontinued Operations, Disposed of by Sale \| Xerox International Partners
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership percentage (percent)		51.00%
Proceeds from sale of equity method investments		$ 23,000,000
Goodwill		9,000,000
Disposal Group, Including Discontinued Operation, Noncontrolling Interest		32,000,000			$ 36,000,000
Discontinued Operations, Disposed of by Sale \| Fuji Xerox Co., Ltd. and Xerox International Partners, The Sales
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Realized gain (loss) on sale		629,000,000
Realized gain (loss) on sale, after tax		539,000,000
Gain (loss) reclassified from AOCL		165,000,000
Transaction costs		$ 9,000,000

Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	$ 148	$ 167	$ 174
Additions charged to bad debt provision	46	36	33
Amounts (credited) charged to other income statement accounts	3	4	13
Deductions and other, net of recoveries	(53)	(59)	(53)
Balance at end of period	144	148	167
Accounts Receivable
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	56	59	64
Additions charged to bad debt provision	18	12	16
Amounts (credited) charged to other income statement accounts	0	2	(2)
Deductions and other, net of recoveries	(19)	(17)	(19)
Balance at end of period	55	56	59
Finance Receivables
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	92	108	110
Additions charged to bad debt provision	28	24	17
Amounts (credited) charged to other income statement accounts	3	2	15
Deductions and other, net of recoveries	(34)	(42)	(34)
Balance at end of period	89	92	108
Deferred Tax Assets
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	397	435	416
Additions charged to bad debt provision	16	3	6
Amounts (credited) charged to other income statement accounts	(14)	(41)	13
Balance at end of period	399	397	435
Xerox Corporation
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	148	167	174
Additions charged to bad debt provision	46		33
Amounts (credited) charged to other income statement accounts	3	4
Deductions and other, net of recoveries	(53)		(53)
Balance at end of period		148	167
Xerox Corporation \| Accounts Receivable
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period		59	64
Additions charged to bad debt provision		12	16
Amounts (credited) charged to other income statement accounts	0	2
Deductions and other, net of recoveries	(19)	(17)	(19)
Balance at end of period	55		59
Xerox Corporation \| Finance Receivables
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	92	108
Additions charged to bad debt provision	28		17
Amounts (credited) charged to other income statement accounts			15
Deductions and other, net of recoveries	(34)	(42)	(34)
Balance at end of period	89	92	108
Xerox Corporation \| Deferred Tax Assets
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	397	435	416
Additions charged to bad debt provision	16	3	6
Amounts (credited) charged to other income statement accounts	(14)	(41)	13
Balance at end of period	$ 399	$ 397	$ 435

Investment in Affiliates, at Equity (Tables)

12 Months Ended

Dec. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

Investments in affiliates, at equity

Investments in corporate joint ventures and other companies in which we generally have a 20% to 50% ownership interest were as follows:



	December 31,
	2019		2018
Fuji Xerox⁽¹⁾	$	—	$	1,360
Other⁽²⁾	46		43
Investments in affiliates, at equity	$	46	$	1,403

_____________


(1)	Balance at December 31, 2018 reported in Other long-term assets of discontinued operations.

(2)

Balance at December 31, 2019 and 2018, respectively, reported in Other long-term assets.

Total equity in net income of unconsolidated affiliates

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



	Year Ended December 31,
	2019		2018		2017
Fuji Xerox⁽¹⁾	$	147	$	25	$	102
Other	8		8		13
Total Equity in net income of unconsolidated affiliates	$	155	$	33	$	115

_____________

(1)

Equity in net income for Fuji Xerox is reported in Income from discontinued operations, net of tax for all years. The equity in net income for Fuji Xerox in 2019 is through the date of sale.

Summarized financial information of equity investment [Table Text Block]

Summarized financial information for Fuji Xerox is as follows:



	Through Date of Sale		Year Ended December 31,
	2019		2018		2017
Summary of Operations
Revenues	$	7,667	$	9,161	$	9,638
Costs and expenses	6,814		8,880		9,072
Income before income taxes	853		281		566
Income tax expense	258		160		144
Net Income	595		121		422
Less: Net income - noncontrolling interests	3		2		5
Net Income - Fuji Xerox	$	592	$	119	$	417

Balance Sheet	At Date of Sale		December 31, 2018		December 31, 2017
Assets
Current assets	$	4,876	$	4,179	$	4,315
Long-term assets	3,964		4,034		4,488
Total Assets	$	8,840	$	8,213	$	8,803
Liabilities and Equity
Short-term debt	$	49	$	130	$	428
Other current liabilities	1,932		1,827		2,079
Long-term debt	16		24		76
Other long-term liabilities	514		395		369
Noncontrolling interests	18		30		33
Fuji Xerox shareholders' equity	6,311		5,807		5,818
Total Liabilities and Equity	$	8,840	$	8,213	$	8,803

Exchange rates used to translate results of equity investments in affiliates

Yen/U.S. Dollar exchange rates used to translate are as follows:



Financial Statement	Exchange Basis	2019	2018	2017
Summary of Operations	Weighted average rate	109.03	110.28	112.14
Balance Sheet	Year-end rate	108.83	110.26	112.87

Transactions with Fuji Xerox

Transactions with Fuji Xerox were as follows:



	Year Ended December 31,
	2019		2018		2017
Royalty revenue earned	$	99	$	96	$	103
Inventory purchases from Fuji Xerox	1,337		1,501		1,585
Inventory sales to Fuji Xerox	33		43		58
R&D payments received from Fuji Xerox	—		1		1
R&D payments paid to Fuji Xerox	4		8		14

Accounts Receivable, Net

12 Months Ended

Dec. 31, 2019

Schedule of short-term borrowings

Accounts Receivable, Net

Accounts receivable, net were as follows:



	December 31,
	2019			2018
Invoiced	$	980		$	992
Accrued	311			334
Allowance for doubtful accounts	(55		)	(56		)
Accounts receivable, net	$	1,236		$	1,270

Accrued receivables includes amounts to be invoiced in the subsequent quarter for current services provided.

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

Accounts Receivable Sales Arrangements

Accounts receivable sales arrangements are utilized in the normal course of business as part of our cash and liquidity management. The accounts receivable sold are generally short-term trade receivables with payment due dates of less than 60 days. We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on an ongoing basis without recourse. Under this arrangement, we sell our entire interest in the related accounts receivable for cash and no portion of the payment is held back or deferred by the purchaser.

Of the accounts receivable sold and derecognized from our balance sheet, $165 and $131 remained uncollected as of December 31, 2019 and 2018, respectively. Accounts receivable sales activity was as follows:



	Year Ended December 31,
	2019		2018		2017
Accounts receivable sales⁽¹⁾	$	393	$	405	$	1,733
Deferred proceeds ⁽²⁾	—		—		164
Loss on sale of accounts receivable	3		3		10

_____________

(1)

Customers may also enter into structured-payable arrangements that require us to sell our receivables from that customer to a third-party financial institution, which then makes payments to us to settle the customer's receivable. In these instances, we ensure the sale of the receivables are bankruptcy-remote and the payment made to us is without recourse. The activity associated with these arrangements is not reflected in this disclosure, as payments under these arrangements have not been material and these are customer directed arrangements.

(2)

During 2017, we terminated all accounts receivable sales arrangements in North America and all but one arrangement in Europe, In these terminated arrangements, a portion of the sales proceeds was normally held back by the purchaser and payment was deferred until collection of the related sold receivables.

Finance Receivables, Net

Finance receivables include sales-type leases and installment loans arising from the marketing of our equipment. These receivables are typically collateralized by a security interest in the underlying equipment. Amounts disclosed below at December 31, 2018 were accounted for under ASC 840, Leases, which was superseded by ASC 842, Leases, which was adopted effective January 1, 2019. Differences upon adoption were not material. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, New Accounting Standards and Accounting Changes for additional information. Finance receivables, net were as follows:



	December 31,
	2019			2018
Gross receivables	$	3,865		$	4,003
Unearned income	(425		)	(439		)
Subtotal	3,440			3,564
Residual values	—			—
Allowance for doubtful accounts	(89		)	(92		)
Finance Receivables, Net	3,351			3,472
Less: Billed portion of finance receivables, net	111			105
Less: Current portion of finance receivables not billed, net	1,158			1,218
Finance Receivables Due After One Year, Net	$	2,082		$	2,149

A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as follows:



	December 31,
	2019		2018
12 Months⁽¹⁾	$	1,490	$	1,543
24 Months	1,052		1,108
36 Months	728		755
48 Months	422		425
60 Months	158		158
Thereafter	15		14
Total	$	3,865	$	4,003

_____________


(1)	Includes amounts previously billed of $115 and $107 as of December 31, 2019 and 2018, respectively.

Finance Receivables - Allowance for Credit Losses and Credit Quality

Our finance receivable portfolios are primarily in the U.S., Canada and Europe. We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis. Customer credit limits are based upon an initial evaluation of the customer's credit quality and we adjust that limit accordingly based upon ongoing credit assessments of the customer, including payment history and changes in credit quality.

The allowance for doubtful accounts and provision for credit losses represents an estimate of the losses expected to be incurred from the Company's finance receivable portfolio. The level of the allowance is determined on a collective basis by applying projected loss rates to our different portfolios by country, which represent our portfolio segments. This is the level at which we develop and document our methodology to determine the allowance for credit losses. This loss rate is primarily based upon historical loss experience adjusted for judgments about the probable effects of relevant observable data including current economic conditions as well as delinquency trends, resolution rates, the aging of receivables, credit quality indicators and the financial health of specific customer classes or groups. The allowance for doubtful finance receivables is inherently more difficult to estimate than the allowance for trade accounts receivable because the underlying lease portfolio has an average maturity, at any time, of approximately two to three years and contains past due billed amounts, as well as unbilled amounts. We consider all available information in our quarterly assessments of the adequacy of the allowance for doubtful accounts. The identification of account-specific exposure is not a significant factor in establishing the allowance for doubtful finance receivables. Our policy and methodology used to establish our allowance for doubtful accounts has been consistently applied over all periods presented.

Since our allowance for doubtful finance receivables is determined by country, the risk characteristics in our finance receivable portfolio segments will generally be consistent with the risk factors associated with the economies of those countries/regions. Charge-offs in the U.S. remained steady and did not change significantly during 2019 and 2018. Since Europe is comprised of various countries and regional economies, the risk profile within our European portfolio segment is somewhat more diversified due to the varying economic conditions among and within the countries. Charge-offs in Europe were $14 in 2019 as compared to $18 in 2018, with the decrease reflecting the stabilization of the Europe portfolio segment.

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



Allowance for Credit Losses:	United States			Canada			Europe			Other⁽¹⁾		Total
Balance at December 31, 2017	$	56		$	15		$	35		$	2	$	108
Provision	12			3			9			—		24
Charge-offs	(17		)	(6		)	(18		)	—		(41		)
Recoveries and other⁽²⁾	2			—			(1		)	—		1
Balance at December 31, 2018	$	53		$	12		$	25		$	2	$	92
Provision	20			1			7			—		28
Charge-offs	(15		)	(5		)	(14		)	—		(34		)
Recoveries and other⁽²⁾	1			2			—			—		3
Balance at December 31, 2019	$	59		$	10		$	18		$	2	$	89
Finance Receivables Collectively Evaluated for Impairment:
December 31, 2018⁽³⁾⁽⁴⁾	$	1,946		$	335		$	1,239		$	44	$	3,564
December 31, 2019⁽³⁾	$	1,922		$	320		$	1,155		$	43	$	3,440

_____________


(1)	Includes developing market countries and smaller units.


(2)	Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.


(3)	Total Finance receivables exclude the allowance for credit losses of $89 and $92 at December 31, 2019 and 2018, respectively.


(4)	As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation.

In the U.S., customers are further evaluated by class based on the type of lease origination. The primary categories are direct, which primarily includes leases originated directly with end customers through bundled lease arrangements, and indirect, which includes lease financing to end-user customers who purchased equipment we sold to distributors or resellers. Indirect also includes leases originated through our XBS sales channel, which utilizes a combination of internal and third party leasing in its lease arrangements with end customers.

In Europe, customers are further grouped by class based on the country or region of the customer. The primary customer classes include the U.K./Ireland, France and the following European regions - Central, Nordic and Southern. These groupings or classes are used to understand the nature and extent of our exposure to credit risk arising from finance receivables.

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

•

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

•

Non-investment grade: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. This rating generally equates to a BB S&P rating. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain with such leases. Loss rates in this category are generally in the range of 2% to 5%.

•

Substandard: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from investment and non-investment grade evaluation when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category are generally in the range of 7% to 10%.

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



	December 31, 2019								December 31, 2018
	Investment Grade		Non-investment Grade		Sub-standard		Total Finance Receivables		Investment Grade		Non-investment Grade		Sub-standard		Total Finance Receivables
Direct	$	640	$	331	$	132	$	1,103	$	785	$	348	$	104	$	1,237
Indirect	258		445		116		819		162		400		147		709
Total United States⁽¹⁾	898		776		248		1,922		947		748		251		1,946
Total Canada	163		91		66		320		162		99		74		335
France	206		137		24		367		232		157		29		418
U.K/Ireland	154		79		8		241		150		87		7		244
Central⁽²⁾	176		113		9		298		196		123		8		327
Southern⁽³⁾	65		125		15		205		52		136		17		205
Nordic⁽⁴⁾	23		19		2		44		28		15		2		45
Total Europe⁽⁵⁾	624		473		58		1,155		658		518		63		1,239
Other	31		12		—		43		31		13		—		44
Total	$	1,716	$	1,352	$	372	$	3,440	$	1,798	$	1,378	$	388	$	3,564

_____________


(1)	As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation.


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


(3)	Italy, Greece, Spain and Portugal.


(4)	Sweden, Norway, Denmark and Finland.


(5)	Prior year amounts have been recasted to conform to the current year presentation.

The aging of our receivables portfolio is based upon the number of days an invoice is past due. Receivables that are more than 90 days past due are considered delinquent. Receivable losses are charged against the allowance when management believes the uncollectibility of the receivable is confirmed and is generally based on individual credit evaluations, results of collection efforts and specific circumstances of the customer. Subsequent recoveries, if any, are credited to the allowance.

We generally continue to maintain equipment on lease and provide services to customers that have invoices for finance receivables that are 90 days or more past due and, as a result of the bundled nature of billings, we also continue to accrue interest on those receivables. However, interest revenue for such billings is only recognized if collectability is deemed reasonably assured. The aging of our billed finance receivables is as follows:



	December 31, 2019
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	37	$	11	$	8	$	56	$	1,047	$	1,103	$	57
Indirect	25		5		3		33		786		819		—
Total United States	62		16		11		89		1,833		1,922		57
Canada	8		1		1		10		310		320		17
France	3		—		—		3		364		367		15
U.K./Ireland	2		—		—		2		239		241		—
Central⁽¹⁾	2		—		1		3		295		298		13
Southern⁽²⁾	3		1		1		5		200		205		4
Nordic⁽³⁾	—		—		—		—		44		44		—
Total Europe	10		1		2		13		1,142		1,155		32
Other	2		1		—		3		40		43		—
Total	$	82	$	19	$	14	$	115	$	3,325	$	3,440	$	106



	December 31, 2018
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	38	$	11	$	7	$	56	$	1,181	$	1,237	$	54
Indirect	18		4		2		24		685		709		—
Total United States	56		15		9		80		1,866		1,946		54
Canada	7		2		1		10		325		335		22
France	5		—		—		5		413		418		14
U.K./Ireland	2		—		—		2		242		244		—
Central⁽¹⁾	1		1		1		3		324		327		6
Southern⁽²⁾	3		1		1		5		200		205		6
Nordic⁽³⁾	—		—		—		—		45		45		—
Total Europe	11		2		2		15		1,224		1,239		26
Other	2		—		—		2		42		44		—
Total	$	76	$	19	$	12	$	107	$	3,457	$	3,564	$	102

_____________


(1)	As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation.


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


(3)	Italy, Greece, Spain and Portugal.

(4)

Sweden, Norway, Denmark and Finland.

Adoption of New Leasing Standard - Lessee - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019
Leases [Abstract]
Remaining terms of leases			11 years
Remaining lease obligation			$ 7
Finance leases, discount rate			4.07%
Finance lease, right-of-use asset			$ 7
Net of sublease income	$ 147	$ 161

Contingencies and Litigation - Brazil Contingencies (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Loss Contingencies [Line Items]
Liens on Brazilian assets	$ 0	$ 0
Brazil Contingencies
Loss Contingencies [Line Items]
Tax contingency - unreserved	442,000,000	500,000,000
Escrow cash deposits	51,000,000	58,000,000
Surety bonds	135,000,000	106,000,000
Letters of credit	91,000,000	104,000,000
Liens on Brazilian assets	$ 0	$ 0

Investment in Affiliates, at Equity (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Nov. 30, 2019
Schedule of Equity Method Investments [Line Items]
Investments in affiliates, at equity	$ 46	$ 1,403
Total Equity in net income of unconsolidated affiliates	8	8	$ 13
Fuji Xerox
Schedule of Equity Method Investments [Line Items]
Investments in affiliates, at equity	0	1,360
Total Equity in net income of unconsolidated affiliates	$ 147	25	102
Ownership percentage (percent)	25.00%			25.00%
After-tax restructuring and other charges	$ 20	95	10
Dividends received from Fuji Xerox	69	23	46
Other
Schedule of Equity Method Investments [Line Items]
Investments in affiliates, at equity	46	43
Total Equity in net income of unconsolidated affiliates	8	8	13
Fuji Xerox And Other
Schedule of Equity Method Investments [Line Items]
Total Equity in net income of unconsolidated affiliates	$ 155	$ 33	$ 115

Accounts Receivable, Net (Details) - USD ($) $ in Millions	12 Months Ended
Accounts Receivable, Net (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net	$ 1,236	$ 1,270
Accounts receivable sold, derecognized and uncollected at balance sheet date	165	131
Accounts receivable sales	393	405	$ 1,733
Deferred proceeds	0	0	164
Loss on sale of accounts receivable	3	3	$ 10
Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Invoiced	980	992
Accrued	311	334
Allowance for doubtful accounts	$ (55)	$ (56)

Contingencies and Litigation - Narrative (Details) $ in Millions		1 Months Ended	12 Months Ended
	Dec. 13, 2019 USD ($)	Feb. 28, 2018 complaint class_action	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jun. 18, 2018 USD ($)
Loss Contingencies [Line Items]
Product warranty expense			$ 12	$ 14	$ 15
Product warranty accrual			7	$ 6
Pending Litigation \| Transactions to Combine Xerox and Fuji Xerox
Loss Contingencies [Line Items]
Number of complaints filed \| complaint		5
Number of class actions filed \| class_action		4
Termination fee						$ 183
Loss contingency, damages sought (in dollars)						$ 1,000
Contractual and Corporate Obligations Guarantee and surety bonds
Loss Contingencies [Line Items]
Guarantor obligations, maximum exposure, undiscounted			$ 348
HP Inc. \| Miami Firefighters' Relief & Pension Fund V. Icahn, Et Al
Loss Contingencies [Line Items]
Marketable Securities, Gain (Loss)	$ 128

Employee Benefit Plans - Plan Amendments (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Pension Plan \| U.K.
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Cost of equalization, percent of defined benefit plan obligation (percent)	1.20%
Amortization to prior service cost, period (years)	24 years
Annual amortization to prior service cost	$ 2
Pension Plan \| U.K. \| United Kingdom, Pounds
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Cost of equalization	33
Pension Plan \| United States \| United States of America, Dollars
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Cost of equalization	42
Other Postretirement Benefits Plan \| Canada
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accumulated benefit obligation, increase (decrease) for plan amendment	(19)
Other Postretirement Benefits Plan \| United States
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accumulated benefit obligation, increase (decrease) for plan amendment	283
Benefit obligation, increase (decrease) for plan amendment	216
Actuarial gain, increase (decrease) for plan amendment	$ 67

Income and Other Taxes (Details) - USD ($) $ in Millions	12 Months Ended
Income and Other Taxes (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Domestic income	$ 679	$ 331	$ 354
Foreign income	143	218	171
Income before Income Taxes and Equity Income	$ 822	$ 549	$ 525

Stock-Based Compensation - Measurement Inputs (Details) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Performance Shares
Stock-Based Compensation Details [Line Items]
Term (years)	3 years	3 years	3 years
Granted (dollars per share)	$ 19.46	$ 27.36	$ 32.80
Equity Option
Stock-Based Compensation Details [Line Items]
Risk-free interest rate (percent)		2.63%
Dividend yield (percent)		3.25%
Historical volatility (percent)		27.25%
Expected term (years)		6 years 1 month 17 days
Weighted average fair value (dollars per share)		$ 5.71
TSR \| Performance Shares
Stock-Based Compensation Details [Line Items]
Term (years)	3 years	3 years
Risk-free interest rate (percent)	2.51%	2.39%
Dividend yield (percent)	3.97%	3.24%
Historical volatility (percent)	32.95%	29.12%
Granted (dollars per share)	$ 16.27	$ 32.01
TSR historical volatility look back period (years)	3 years

Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Short-term borrowings were as follows:



	December 31,
	2019		2018
Current maturities of long-term debt	$	1,049	$	961
Short-term debt and current portion of long-term debt	$	1,049	$	961

Schedule of long-term debt

Long-term debt was as follows:



					December 31,
	Stated Rate		Weighted Average Interest Rates at December 31, 2019⁽¹⁾		2019			2018
Xerox
Senior Notes due 2019					$	—		$	406
Senior Notes due 2019					—			554
Senior Notes due 2020	2.80	%	2.50	%	313			313
Senior Notes due 2020	3.50	%	3.47	%	362			362
Senior Notes due 2020	2.75	%	2.67	%	376			375
Senior Notes due 2021	4.50	%	4.54	%	1,062			1,062
Senior Notes due 2022	4.07	%	4.07	%	300			300
Senior Notes due 2023⁽²⁾	4.13	%	3.68	%	1,000			1,000
Senior Notes due 2024	3.80	%	3.84	%	300			300
Senior Notes due 2035	4.80	%	4.84	%	250			250
Senior Notes due 2039	6.75	%	6.78	%	350			350
Subtotal - Notes					$	4,313		$	5,272

Capital lease obligations⁽³⁾					$	—		$	9

Principal debt balance					$	4,313		$	5,281
Unamortized discount					(16		)	(25		)
Debt issuance costs					(17		)	(25		)
Fair value adjustments⁽⁴⁾
Terminated swaps					1			2
Current swaps					1			(3		)
Less: current maturities					(1,049		)	(961		)
Total Long-term Debt					$	3,233		$	4,269

_____________


(1)	Represents the weighted average effective interest rate, which includes the effect of discounts and premiums on issued debt.


(2)	As a result of the downgrade of our debt ratings in December 2018, the original coupon rate of 3.625% increased by 0.50% to 4.125% effective March 15, 2019.


(3)	As a result of the adoption of ASC 842, Leases effective January 1, 2019, capital lease obligations are reported in Other current and non-current liabilities. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, Note 2 - Adoption of New Leasing Standard - Lessee and Note 15 - Supplementary Financial Information for additional information.

(4)

Fair value adjustments include the following: (i) fair value adjustments to debt associated with terminated interest rate swaps, which are being amortized to interest expense over the remaining term of the related notes; and (ii) changes in fair value of hedged debt obligations attributable to movements in benchmark interest rates. Hedge accounting requires hedged debt instruments to be reported inclusive of any fair value adjustment.

Schedule of maturities of long-term debt

Scheduled principal payments due on our long-term debt for the next five years and thereafter are as follows:



2020⁽¹⁾		2021		2022		2023		2024		Thereafter		Total
$	1,051	$	1,062	$	300	$	1,000	$	300	$	600	$	4,313

_____________


(1)	Long-term debt maturities for 2020 are $0, $313, $738 and $0 for the first, second, third and fourth quarters, respectively.

Interest income and interest expense disclosure

Interest expense and interest income was as follows:



	Year Ended December 31,
	2019		2018		2017
Interest expense⁽¹⁾	$	236	$	244	$	252
Interest income⁽²⁾	260		283		302

_____________


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

(2)

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

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 505
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.4-08.(e),(f))
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Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
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-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
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-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Adoption of New Leasing Standard - Lessee - Maturities and Additional Information Related to Operating Lease Liabilities (Details) $ in Millions	Dec. 31, 2019 USD ($)
Leases [Abstract]
2020	$ 109
2021	87
2022	73
2023	56
2024	24
Thereafter	45
Total Lease payments	394
Less: Imputed interest	47
Total Operating lease liabilities	$ 347

Financial Instruments

12 Months Ended

Dec. 31, 2019

Financial Instruments

We are exposed to market risk from changes in foreign currency exchange rates and interest rates, which could affect operating results, financial position and cash flows. We manage our exposure to these market risks through our regular operating and financing activities and, when appropriate, through the use of derivative financial instruments. These derivative financial instruments are utilized to hedge economic exposures, as well as to reduce earnings and cash flow volatility resulting from shifts in market rates. We enter into limited types of derivative contracts, including interest rate swap agreements, foreign currency spot, forward and swap contracts and net purchased foreign currency options to manage interest rate and foreign currency exposures. Our primary foreign currency market exposures include the Japanese Yen, Euro and U.K. Pound Sterling. The fair market values of all our derivative contracts change with fluctuations in interest rates and/or currency exchange rates and are designed so that any changes in their values are offset by changes in the values of the underlying exposures. Derivative financial instruments are held solely as risk management tools and not for trading or speculative purposes. The related cash flow impacts of all of our derivative activities are reflected as cash flows from operating activities.

We do not believe there is significant risk of loss in the event of non-performance by the counterparties associated with our derivative instruments because these transactions are executed with a diversified group of major financial institutions. Further, our policy is to deal only with counterparties having a minimum investment grade or better credit rating. Credit risk is managed through the continuous monitoring of exposures to such counterparties.

Interest Rate Risk Management

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

Terminated Swaps

During the period from 2004 to 2011, we early terminated several interest rate swaps that were designated as fair value hedges of certain debt instruments. The associated net fair value adjustments to the debt instruments are being amortized to interest expense over the remaining term of the related notes. In 2019, 2018 and 2017, the amortization of these fair value adjustments reduced interest expense by $1, $3 and $13, respectively. The remaining unamortized gain balance associated with these terminated swaps was $1 at December 31, 2019.

Fair Value Hedges

As of December 31, 2019 and 2018, pay variable/received fixed interest rate swaps with notional amounts of $200 and $300, respectively, and net asset (liability) fair value of $1 and $(3), respectively, were designated and accounted for as fair value hedges. The decrease in the notional amount reflects the early termination of an interest rate swap with a $100 notional amount in 2019. The fair value associated with the terminated swap was immaterial at the time of termination. The swaps are structured to hedge the fair value of related debt by converting them from fixed rate instruments to variable rate instruments. No ineffective portion was recorded to earnings for the three years ended December 31, 2019.

The following is a summary of our fair value hedges at December 31, 2019:



Debt Instrument	Year First Designated	Notional Amount		Net Fair Value		Weighted Average Interest Rate Paid		Interest Rate Received		Basis	Maturity
Senior Note 2021	2014	$	200	$	1	3.35	%	4.50	%	Libor	2021

Foreign Exchange Risk Management

We are a global company and we are exposed to foreign currency exchange rate fluctuations in the normal course of our business. As a part of our foreign exchange risk management strategy, we use derivative instruments, primarily forward contracts and purchased option contracts, to hedge the following foreign currency exposures, thereby reducing volatility of earnings or protecting fair values of assets and liabilities:


•	Foreign currency-denominated assets and liabilities


•	Forecasted purchases, and sales in foreign currency

At December 31, 2019, we had outstanding forward exchange contracts with gross notional values of $1,091, with terms of less than 12 months. Approximately 82% of these contracts at December 31, 2019 mature within three months, 9% in three to six months and 9% in six to twelve months.

The following is a summary of the primary hedging positions and corresponding fair values as of December 31, 2019:



Currencies Hedged (Buy/Sell)	Gross Notional Value		Fair Value Asset⁽¹⁾
Japanese Yen/U.S. Dollar	$	369	$	(2	)
Japanese Yen/Euro	264		(3		)
U.S. Dollar/Euro	122		—
Euro/U.S. Dollar	71		—
Euro/U.K. Pound Sterling	64		—
U.S. Dollar/Canadian Dollar	50		(1		)
Euro/Danish Krone	29		—
U.K. Pound Sterling/Euro	27		—
U.S. Dollar/Russian Ruble	22		(1		)
U.S. Dollar/Japanese Yen	14		—
Euro/Swiss Franc	12		—
U.S. Dollar/Israeli Shekel	9		—
All Other	38		1
Total Foreign exchange hedging	$	1,091	$	(6	)

____________


(1)	Represents the net receivable (payable) amount included in the Consolidated Balance Sheet at December 31, 2019.

Foreign Currency Cash Flow Hedges

We designate a portion of our foreign currency derivative contracts as cash flow hedges of our foreign currency-denominated inventory purchases, sales and expenses. No amount of ineffectiveness was recorded in the Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or loss was included in the assessment of hedge effectiveness. The net (liability) asset fair value of these contracts were $(4) and $8 as of December 31, 2019 and 2018, respectively.

Summary of Derivative Instruments Fair Value

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



		December 31,
Designation of Derivatives	Balance Sheet Location	2019			2018
Derivatives Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	1		$	7
	Accrued expensed and other current liabilities	(5		)	—
Foreign currency options	Other current assets	—			1
Interest rate swaps	Other long-term assets	1			—
	Other long-term liabilities	—			(3		)
	Net Designated Derivative (Liability) Asset	$	(3	)	$	5

Derivatives NOT Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	1		$	7
	Accrued expensed and other current liabilities	(3		)	(1		)
	Net Undesignated Derivative (Liability) Asset	$	(2	)	$	6

Summary of Derivatives	Total Derivative Assets	$	3		$	15
	Total Derivative Liabilities	(8		)	(4		)
	Net Derivative (Liability) Asset	$	(5	)	$	11

Summary of Derivative Instruments Gains (Losses)

Derivative gains and (losses) affect the income statement based on whether such derivatives are designated as hedges of underlying exposures. The following is a summary of derivative gains and (losses).

Designated Derivative Instruments Gains (Losses)

The following tables provide a summary of gains (losses) on derivative instruments:



		Year Ended December 31,
Derivatives in Fair Value Relationships	Location of Gain (Loss) Recognized in Income	Derivative Gain (Loss) Recognized in Income								Hedged Item (Loss) Gain Recognized in Income
Derivatives in Fair Value Relationships	Location of Gain (Loss) Recognized in Income	2019		2018			2017			2019			2018		2017
Interest rate contracts	Interest expense	$	4	$	(3	)	$	(3	)	$	(4	)	$	3	$	3



	Year Ended December 31,
Derivatives in Cash Flow Hedging Relationships	Derivative Gain (Loss) Recognized in OCI (Effective Portion)							Location of Derivative Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI to Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	2019		2018		2017				2019		2018			2017
Foreign exchange contracts – forwards/options	$	2	$	9	$	(28	)	Cost of sales	$	9	$	(14	)	$	(35	)

For the three years ended December 31, 2019 no amount of ineffectiveness was recorded in the Consolidated Statements of Income for these designated cash flow hedges. All components of each derivative’s gain or (loss) were included in the assessment of hedge effectiveness. In addition, no amount was recorded for an underlying exposure that did not occur or was not expected to occur.

At December 31, 2019, a net after-tax loss of $2 was recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity. The entire balance is expected to be reclassified into Net income within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions.

Non-Designated Derivative Instruments Gains (Losses)

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

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



		Year Ended December 31,
Derivatives NOT Designated as Hedging Instruments	Location of Derivative Gain (Loss)	2019			2018		2017
Foreign exchange contracts – forwards	Other expense – Currency (losses) gains, net	$	(6	)	$	21	$	(44	)

For the three years ended December 31, 2019, 2018 and 2017, we recorded Currency losses, net of $7, $5 and $4, respectively. Net currency gains and losses include the mark-to-market adjustments of the derivatives not designated as hedging instruments and the related cost of those derivatives, as well as the remeasurement of foreign currency-denominated assets and liabilities and are included in Other expenses, net.

Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2019

Accounts receivable sales activity

Accounts receivable, net

Accounts receivable, net were as follows:



	December 31,
	2019			2018
Invoiced	$	980		$	992
Accrued	311			334
Allowance for doubtful accounts	(55		)	(56		)
Accounts receivable, net	$	1,236		$	1,270

Accounts receivable sales activity was as follows:



	Year Ended December 31,
	2019		2018		2017
Accounts receivable sales⁽¹⁾	$	393	$	405	$	1,733
Deferred proceeds ⁽²⁾	—		—		164
Loss on sale of accounts receivable	3		3		10

_____________

(1)

(2)

Adoption of New Leasing Standard - Lessee - Components of Lease Expense (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Leases [Abstract]
Operating lease expense	$ 125
Short-term lease expense	21
Variable lease expense	48
Sublease income	(1)
Total Lease expense	$ 193

Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt

Short-term borrowings were as follows:



	December 31,
	2019		2018
Current maturities of long-term debt	$	1,049	$	961
Short-term debt and current portion of long-term debt	$	1,049	$	961

We classify our debt based on the contractual maturity dates of the underlying debt instruments or as of the earliest put date available to the debt holders. We defer costs associated with debt issuance over the applicable term, or to the first put date in the case of convertible debt or debt with a put feature. These costs are amortized as interest expense in our Consolidated Statements of Income.

Long-term debt was as follows:



					December 31,
	Stated Rate		Weighted Average Interest Rates at December 31, 2019⁽¹⁾		2019			2018
Xerox
Senior Notes due 2019					$	—		$	406
Senior Notes due 2019					—			554
Senior Notes due 2020	2.80	%	2.50	%	313			313
Senior Notes due 2020	3.50	%	3.47	%	362			362
Senior Notes due 2020	2.75	%	2.67	%	376			375
Senior Notes due 2021	4.50	%	4.54	%	1,062			1,062
Senior Notes due 2022	4.07	%	4.07	%	300			300
Senior Notes due 2023⁽²⁾	4.13	%	3.68	%	1,000			1,000
Senior Notes due 2024	3.80	%	3.84	%	300			300
Senior Notes due 2035	4.80	%	4.84	%	250			250
Senior Notes due 2039	6.75	%	6.78	%	350			350
Subtotal - Notes					$	4,313		$	5,272

Capital lease obligations⁽³⁾					$	—		$	9

Principal debt balance					$	4,313		$	5,281
Unamortized discount					(16		)	(25		)
Debt issuance costs					(17		)	(25		)
Fair value adjustments⁽⁴⁾
Terminated swaps					1			2
Current swaps					1			(3		)
Less: current maturities					(1,049		)	(961		)
Total Long-term Debt					$	3,233		$	4,269

_____________


(1)	Represents the weighted average effective interest rate, which includes the effect of discounts and premiums on issued debt.


(2)	As a result of the downgrade of our debt ratings in December 2018, the original coupon rate of 3.625% increased by 0.50% to 4.125% effective March 15, 2019.


(3)	As a result of the adoption of ASC 842, Leases effective January 1, 2019, capital lease obligations are reported in Other current and non-current liabilities. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, Note 2 - Adoption of New Leasing Standard - Lessee and Note 15 - Supplementary Financial Information for additional information.

(4)

Scheduled principal payments due on our long-term debt for the next five years and thereafter are as follows:



2020⁽¹⁾		2021		2022		2023		2024		Thereafter		Total
$	1,051	$	1,062	$	300	$	1,000	$	300	$	600	$	4,313

_____________


(1)	Long-term debt maturities for 2020 are $0, $313, $738 and $0 for the first, second, third and fourth quarters, respectively.

Credit Facility

We have a $1.8 billion unsecured revolving Credit Facility with a group of lenders, which matures in August 2022. The Credit Facility includes a $250 letter of credit sub-facility as well as an accordion feature that allows us to increase (from time to time, with willing lenders) the overall size of the facility by $750. We also have the right to request a one year extension on any anniversary of the restated amendment date.

Proceeds from any borrowings under the Credit Facility can be used to provide working capital for the Company and its subsidiaries and for general corporate purposes. The Credit Facility is available, without sublimit, to certain of our qualifying subsidiaries. Our obligations under the Credit Facility are unsecured and are not currently guaranteed by any of our subsidiaries. Any domestic subsidiary that guarantees more than $100 of Xerox Corporation debt must also guaranty our obligations under the Credit Facility. In the event that any of our subsidiaries borrows under the Credit Facility, its borrowings thereunder would be guaranteed by us. At December 31, 2019 and 2018, we had no outstanding borrowings or letters of credit under the amended and restated Credit Facility.

Borrowings under the Credit Facility bear interest at our choice, at either (a) a Base Rate as defined in the new Credit Facility agreement, plus a spread that varies between 0.000% and 0.700% depending on our credit rating at the time of borrowing, or (b) LIBOR plus an all-in spread that varies between 1.000% and 1.700% depending on our credit rating at the time of borrowing. Based on our credit rating as of December 31, 2019, the applicable all-in spreads for the Base Rate and LIBOR borrowing were 0.375% and 1.375%, respectively.

An annual facility fee is payable to each lender in the Credit Facility at a rate that varies between 0.125% and 0.300% depending on our credit rating. Based on our credit rating as of December 31, 2019 the applicable rate is 0.25%.

The Credit Facility contains various conditions to borrowing and affirmative, negative and financial maintenance covenants. Certain of the more significant covenants are summarized below:


(a)	Maximum leverage ratio (a quarterly test that is calculated as principal debt divided by consolidated EBITDA, both as defined in the amended and restated Credit Facility) of 4.25x.


(b)	Minimum interest coverage ratio (a quarterly test that is calculated as consolidated EBITDA divided by consolidated interest expense, both as defined in the amended and restated Credit Facility) may not be less than 3.00x.


(c)	Limitations on (i) liens securing debt, (ii) mergers, consolidations and liquidations, (iii) limitations on debt incurred by certain subsidiaries, (iv) sale of all or substantially all our assets, (v) payment restrictions affecting subsidiaries, (vi) non-arm's length transactions with affiliates, (vii) change in nature of business, (viii) actions that may violate OFAC and anti-corruption laws.

The Credit Facility contains various events of default that are substantially similar to those included in the prior, 2014 $2.0 billion Credit Facility, the occurrence of which could result in termination of the lenders' commitments to lend and the acceleration of all our obligations under the amended and restated Credit Facility. These events of default include, without limitation: (i) payment defaults, (ii) breaches of covenants under the amended and restated Credit Facility (certain of which breaches do not have any grace period), (iii) cross-defaults and acceleration to certain of our other obligations and (iv) a change of control of Xerox Holdings.

On July 31, 2019, Xerox completed the Reorganization, pursuant to which Xerox became a direct, wholly-owned subsidiary of Xerox Holdings. In connection with the Reorganization, Xerox Holdings became a guarantor of Xerox’s existing Credit Facility.

Commercial Paper

Xerox terminated its $1.8 billion commercial paper (CP) program in the U.S. in March of 2019. No borrowings were made under this program during 2019 prior to its termination.

Interest

Interest paid on our short-term and long-term debt amounted to $221, $231 and $268 for the years ended December 31, 2019, 2018 and 2017, respectively.

Interest expense and interest income was as follows:



	Year Ended December 31,
	2019		2018		2017
Interest expense⁽¹⁾	$	236	$	244	$	252
Interest income⁽²⁾	260		283		302

_____________


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


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

Equipment financing interest is determined based on an estimated cost of funds, applied against the estimated level of debt required to support our net finance receivables. The estimated cost of funds is based on the interest cost associated with actual borrowings determined to be in support of the leasing business. The estimated level of debt continues to be based on an assumed 7 to 1 leverage ratio of debt/equity as compared to our average finance receivable balance during the applicable period.

Goodwill and Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

Goodwill

The following table presents the changes in the carrying amount of goodwill:



	Total
Balance at December 31, 2016⁽¹⁾	$	3,778
Foreign currency translation	105
Acquisitions:
MT Business	33
Other	11
Divestiture⁽²⁾	(6		)
Balance at December 31, 2017	$	3,921
Foreign currency translation	(63		)
Balance at December 31, 2018	$	3,858
Foreign currency translation	28
Acquisitions	14
Balance at December 31, 2019	$	3,900

_____________


(1)	Balance at December 31, 2016 has been reduced by $9 to reflect the allocation of goodwill to the sale of XIP, which is accounted for as a discontinued operation. Refer to Note 7 - Divestitures for additional information regarding this divestiture.


(2)	Relates to the sale of Xerox Research Centre Europe in Grenoble, France to Naver. Refer to Note 7 - Divestitures for additional information regarding this divestiture.

Schedule of intangible assets, net, by major class

Intangible Assets, Net

Net intangible assets were $199 at December 31, 2019. Intangible assets were comprised of the following:



		December 31, 2019						December 31, 2018
	Weighted Average Amortization	Gross Carrying Amount		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount
Customer relationships	10 years	$	140	$	86	$	54	$	317	$	263	$	54
Distribution network	25 years	123		99		24		123		93		30
Trademarks	20 years	258		146		112		260		133		127
Technology and non-compete	12 years	18		9		9		15		6		9
Total Intangible Assets		$	539	$	340	$	199	$	715	$	495	$	220

Fair Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of fair value of financial assets and liabilities

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



	As of December 31,
	2019		2018
Assets
Foreign exchange contracts - forwards	$	2	$	14
Foreign currency options	—		1
Interest rate swaps	1		—
Deferred compensation investments in mutual funds	19		16
Total	$	22	$	31
Liabilities
Foreign exchange contracts - forwards	$	8	$	1
Interest rate swaps	—		3
Deferred compensation plan liabilities	18		16
Total	$	26	$	20

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

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



	December 31, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	2,740	$	2,740	$	1,081	$	1,081
Accounts receivable, net	1,236		1,236		1,270		1,270
Short-term debt and current portion of long-term debt	1,049		1,054		961		966
Long-term debt	3,233		3,331		4,269		3,922

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.

Schedule of net funded status

Earnings per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Basic Earnings (Loss) per Share:
Net Income from continuing operations attributable to Xerox Holdings													$ 648	$ 306	$ 66
Accrued dividends on preferred stock													(14)	(14)	(14)
Accrued dividends on preferred stock													0	(14)	(14)
Adjusted Net income from continuing operations available to common shareholders													634	292	52
Income from discontinued operations attributable to Xerox Holdings, net of tax													705	55	129
Adjusted Net income available to common shareholders													$ 1,339	$ 347	$ 181
Weighted-average common shares outstanding													221,969	248,707	254,341
Continuing operations (in dollars per share)													$ 2.86	$ 1.17	$ 0.20
Discontinued operations (in dollars per share)													3.17	0.23	0.51
Basic Earnings per Share													$ 6.03	$ 1.40	$ 0.71
Diluted Earnings (Loss) per Share:
Net Income from continuing operations attributable to Xerox Holdings													$ 648	$ 306	$ 66
Accrued dividends on preferred stock													0	(14)	(14)
Adjusted Net income from continuing operations available to common shareholders													648	292	52
Income from discontinued operations attributable to Xerox Holdings, net of tax													705	55	129
Adjusted Net income available to common shareholders													$ 1,353	$ 347	$ 181
Weighted-average common shares outstanding													221,969	248,707	254,341
Common shares issuable with respect to:
Adjusted Weighted average common shares outstanding													233,169	251,660	256,570
Continuing operations (in dollars per share)													$ 2.78	$ 1.16	$ 0.20
Discontinued operations (in dollars per share)													3.02	0.22	0.51
Diluted Earnings per Share													$ 5.80	$ 1.38	$ 0.71
Stock options, shares													2,077	10,832	10,448
Dividends per common share (in dollars per share)	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.28	$ 1.00	$ 1	$ 1
Stock options
Common shares issuable with respect to:
Stock options, Restricted stock and performance shares													55	0	0
Restricted stock and performance shares
Common shares issuable with respect to:
Stock options, Restricted stock and performance shares													4,403	2,953	2,229
Convertible preferred stock
Common shares issuable with respect to:
Convertible preferred stock, shares													6,742	0	0
Stock options
Common shares issuable with respect to:
Stock options, shares													805	1,022	0
Restricted stock and performance shares
Common shares issuable with respect to:
Stock options, shares													1,272	3,068	3,706
Convertible preferred stock
Common shares issuable with respect to:
Stock options, shares													0	6,742	6,742

Goodwill and Intangible Assets, Net - Intangible Assets by Major Class (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 539	$ 715
Accumulated Amortization	340	495
Net Amount	199	220
Amortization of intangible assets	45	48	$ 53
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2020	36
2021	36
2022	32
2023	30
2024	$ 18
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization	10 years
Gross Carrying Amount	$ 140	317
Accumulated Amortization	86	263
Net Amount	$ 54	54
Distribution network
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization	25 years
Gross Carrying Amount	$ 123	123
Accumulated Amortization	99	93
Net Amount	$ 24	30
Trademarks
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization	20 years
Gross Carrying Amount	$ 258	260
Accumulated Amortization	146	133
Net Amount	$ 112	127
Technology and non-compete
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization	12 years
Gross Carrying Amount	$ 18	15
Accumulated Amortization	9	6
Net Amount	$ 9	$ 9

Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2019

Defined Benefit Plan [Abstract]



	Pension Benefits
	U.S. Plans						Non-U.S. Plans						Retiree Health
	2019			2018			2019			2018			2019			2018
Change in Benefit Obligation:
Benefit obligation, January 1	$	3,234		$	4,180		$	6,007		$	6,703		$	385		$	723
Service cost	2			2			22			27			2			4
Interest cost	218			63			153			149			15			23
Plan participants' contributions	—			—			3			4			10			3
Actuarial loss (gain)	564			(288		)	472			(293		)	8			(63		)
Currency exchange rate changes	—			—			114			(339		)	5			(11		)
Plan Amendments/Curtailments	—			—			(2		)	41			—			(234		)
Benefits paid/settlements	(420		)	(723		)	(270		)	(281		)	(40		)	(60		)
Other	—			—			(7		)	(4		)	—			—
Benefit Obligation, December 31	$	3,598		$	3,234		$	6,492		$	6,007		$	385		$	385

Change in Plan Assets:
Fair value of plan assets, January 1	$	2,358		$	3,224		$	5,729		$	6,308		$	—		$	—
Actual return on plan assets	529			(170		)	680			(85		)	—			—
Employer contributions	26			27			115			117			30			57
Plan participants' contributions	—			—			3			4			10			3
Currency exchange rate changes	—			—			135			(329		)	—			—
Benefits paid/settlements	(420		)	(723		)	(270		)	(281		)	(40		)	(60		)
Other	—			—			(7		)	(5		)	—			—
Fair Value of Plan Assets, December 31	$	2,493		$	2,358		$	6,385		$	5,729		$	—		$	—

Net Funded Status at December 31⁽¹⁾	$	(1,105	)	$	(876	)	$	(107	)	$	(278	)	$	(385	)	$	(385	)

Amounts Recognized in the Consolidated Balance Sheets:
Other long-term assets	$	—		$	—		$	451		$	281		$	—		$	—
Accrued compensation and benefit costs	(25		)	(25		)	(22		)	(24		)	(33		)	(35		)
Pension and other benefit liabilities	(1,080		)	(851		)	(536		)	(535		)	—			—
Post-retirement medical benefits	—			—			—			—			(352		)	(350		)
Net Amounts Recognized	$	(1,105	)	$	(876	)	$	(107	)	$	(278	)	$	(385	)	$	(385	)

Accumulated Benefit Obligation	$	3,598		$	3,234		$	6,326		$	5,847

_____________

(1)

Includes under-funded and unfunded plans.

Schedule of amounts in accumulated other comprehensive loss to be recognized over next fiscal year

Benefit plans pre-tax amounts recognized in AOCL at December 31:



	Pension Benefits
	U.S. Plans						Non-U.S. Plans				Retiree Health
	2019			2018			2019		2018		2019			2018
Net actuarial loss (gain)	$	1,059		$	933		$	1,462	$	1,457	$	(29	)	$	(42	)
Prior service (credit) cost	(3		)	(5		)	22		19		(164		)	(240		)
Total Pre-tax loss (gain)	$	1,056		$	928		$	1,484	$	1,476	$	(193	)	$	(282	)

Schedule of accumulated benefit obligations in excess of fair value of plan assets

Aggregate information for pension plans with an Accumulated benefit obligation in excess of plan assets is presented below. Information for Retiree Health plans with an accumulated post-retirement benefit obligation in excess of plan assets has been disclosed in the preceding table on Benefit obligations and Net funded status as all Retiree Health plans are unfunded.



	December 31, 2019				December 31, 2018
	Accumulated Benefit Obligation		Fair Value of Plan Assets		Accumulated Benefit Obligation		Fair Value of Plan Assets
Underfunded Plans:
U.S.	$	3,261	$	2,493	$	2,918	$	2,358
Non U.S.	767		697		713		624

Unfunded Plans:
U.S.	$	337	$	—	$	316	$	—
Non U.S.	469		—		446		—

Total Underfunded and Unfunded Plans:
U.S.	$	3,598	$	2,493	$	3,234	$	2,358
Non U.S.	1,236		697		1,159		624
Total	$	4,834	$	3,190	$	4,393	$	2,982

Aggregate information for pension plans with a benefit obligation in excess of plan assets is presented below:



	December 31, 2019				December 31, 2018
	Benefit Obligation		Fair Value of Plan Assets		Benefit Obligation		Fair Value of Plan Assets
Underfunded Plans:
U.S.	$	3,261	$	2,493	$	2,918	$	2,358
Non U.S.	780		697		888		782

Unfunded Plans:
U.S.	$	337	$	—	$	316	$	—
Non U.S.	479		—		456		—

Total Underfunded and Unfunded Plans:
U.S.	$	3,598	$	2,493	$	3,234	$	2,358
Non U.S.	1,259		697		1,344		782
Total	$	4,857	$	3,190	$	4,578	$	3,140

Schedule of defined benefit pension assets and obligations by geography

Our pension plan assets and benefit obligations at December 31, 2019 were as follows:



	Fair Value of Pension Plan Assets		Pension Benefit Obligations		Net Funded Status
U.S. funded	$	2,493	$	3,261	$	(768	)
U.S. unfunded	—		337		(337		)
Total U.S.	2,493		3,598		(1,105		)
U.K.	4,169		3,798		371
Netherlands	1,083		1,101		(18		)
Canada	721		738		(17		)
Germany	—		367		(367		)
Other	412		488		(76		)
Total	$	8,878	$	10,090	$	(1,212	)

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

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



	Year Ended December 31,
	Pension Benefits
	U.S. Plans									Non-U.S. Plans									Retiree Health
	2019			2018			2017			2019			2018			2017			2019			2018			2017
Components of Net Periodic Benefit Costs:
Service cost	$	2		$	2		$	2		$	22		$	27		$	29		$	2		$	4		$	5
Interest cost⁽¹⁾	218			63			226			153			149			158			15			23			28
Expected return on plan assets⁽²⁾	(210		)	(67		)	(227		)	(233		)	(244		)	(221		)	—			—			—
Recognized net actuarial loss (gain)	24			22			21			43			56			79			(5		)	—			1
Amortization of prior service credit	(2		)	(2		)	(2		)	(2		)	(4		)	(4		)	(77		)	(19		)	(4		)
Recognized settlement loss	93			173			133			1			1			2			—			—			—
Recognized curtailment gain	—			—			—			—			(1		)	(2		)	—			—			—
Defined Benefit Plans	125			191			153			(16		)	(16		)	41			(65		)	8			30
Defined contribution plans	26			37			38			23			29			29			n/a			n/a			n/a
Net Periodic Benefit Cost (Credit)	151			228			191			7			13			70			(65		)	8			30
Other changes in plan assets and benefit obligations recognized in Other Comprehensive (Loss) Income:
Net actuarial loss (gain) ⁽³⁾	243			(50		)	238			24			33			(273		)	8			(63		)	(16		)
Prior service cost (credit)	—			—			—			—			41			(1		)	—			(234		)	—
Amortization of net actuarial (loss) gain	(117		)	(195		)	(154		)	(44		)	(57		)	(81		)	5			—			(1		)
Amortization of net prior service credit	2			2			2			2			4			4			77			19			4
Curtailment gain	—			—			—			—			1			—			—			—			—
Total Recognized in Other Comprehensive (Loss) Income⁽⁴⁾	128			(243		)	86			(18		)	22			(351		)	90			(278		)	(13		)
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income	$	279		$	(15	)	$	277		$	(11	)	$	35		$	(281	)	$	25		$	(270	)	$	17

_____________


(1)	Interest cost for Pension Benefits includes interest expense on non-TRA obligations of $243, $258 and $257 and interest expense (income) directly allocated to TRA participant accounts of $128, $(46) and $127 for the years ended December 31, 2019, 2018 and 2017, respectively.


(2)	Expected return on plan assets includes expected investment income on non-TRA assets of $315, $357 and $321 and actual investment (loss) income on TRA assets of $128, $(46) and $127 for the years ended December 31, 2019, 2018 and 2017, respectively.


(3)	The non-U.S. plans Net actuarial (gain) loss for 2018 reflects an out-of-period adjustment in third quarter 2018 of $(53) to correct an overstated benefit obligation for our U.K. Final Salary Pension Plan at December 31, 2017. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information regarding this adjustment.


(4)	Amounts represent the pre-tax effect included in Other comprehensive (loss) income. Refer to Note 25 - Other Comprehensive (Loss) Income for the related tax effects and the net of tax amounts.

Defined benefit plan assets measured at fair value, observable and unobservable inputs

The following tables present the defined benefit plans assets measured at fair value and the basis for that measurement.



	December 31, 2019
	U.S. Plans											Non-U.S. Plans
Asset Class	Level 1			Level 2		Level 3		Assets measured at NAV⁽¹⁾		Total		Level 1		Level 2		Level 3		Assets measured at NAV⁽¹⁾		Total
Cash and cash equivalents	$	9		$	—	$	—	$	—	$	9	$	421	$	—	$	—	$	—	$	421
Equity Securities:
U.S.	182			—		—		39		221		132		52		—		—		184
International	193			—		—		191		384		462		302		—		118		882
Fixed Income Securities:
U.S. treasury securities	—			316		—		—		316		—		47		—		—		47
Debt security issued by government agency	—			67		—		—		67		—		1,825		—		—		1,825
Corporate bonds	—			1,119		—		—		1,119		—		841		—		—		841
Derivatives	—			45		—		—		45		—		186		—		—		186
Real estate	—			—		5		10		15		—		—		219		116		335
Private equity/venture capital	—			—		—		199		199		—		—		5		1,527		1,532
Guaranteed insurance contracts	—			—		—		—		—		—		—		90		—		90
Other⁽²⁾⁽³⁾	(36		)	—		—		154		118		11		31		—		—		42
Total Fair Value of Plan Assets	$	348		$	1,547	$	5	$	593	$	2,493	$	1,026	$	3,284	$	314	$	1,761	$	6,385

_____________


(1)	Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.


(2)	Other NAV includes mutual funds of $76 (measured at NAV) which are invested approximately 75% in fixed income securities and approximately 25% in equity securities.


(3)	Other Level 1 includes net non-financial (liabilities) assets of $(36) U.S. and $11 Non-U.S., respectively, such as due to/from broker, interest receivables and accrued expenses.



	December 31, 2018
	U.S. Plans												Non-U.S. Plans
Asset Class	Level 1		Level 2			Level 3		Assets measured at NAV⁽¹⁾		Total			Level 1		Level 2		Level 3		Assets measured at NAV⁽¹⁾		Total
Cash and cash equivalents	$	1	$	—		$	—	$	—	$	1		$	370	$	—	$	—	$	—	$	370
Equity Securities:
U.S.	82		—			—		35		117			103		42		—		—		145
International	97		—			—		52		149			359		111		—		112		582
Fixed Income Securities:
U.S. treasury securities	—		248			—		—		248			—		57		—		—		57
Debt security issued by government agency	—		81			—		—		81			—		1,861		—		—		1,861
Corporate bonds	—		1,363			—		—		1,363			—		736		—		—		736
Derivatives	—		(26		)	—		—		(26		)	—		99		—		—		99
Real estate	19		—			—		9		28			—		—		210		157		367
Private equity/venture capital	—		—			—		353		353			—		—		6		1,386		1,392
Guaranteed insurance contracts	—		—			—		—		—			—		—		92		—		92
Other⁽²⁾	12		—			—		32		44			5		23		—		—		28
Total Fair Value of Plan Assets	$	211	$	1,666		$	—	$	481	$	2,358		$	837	$	2,929	$	308	$	1,655	$	5,729

_____________


(1)	Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

(2)

Other Level 1 includes net non-financial (liabilities) assets of $12 U.S. and $5 Non-U.S., respectively, such as due to/from broker, interest receivables and accrued expenses.

Schedule of fair value, assets measured on recurring basis, unobservable input reconciliation

The following tables represents a roll-forward of the defined benefit plans assets measured at fair value using significant unobservable inputs (Level 3 assets):



	U.S.			Non-U.S.
	Real Estate			Real Estate			Private Equity/Venture Capital			Guaranteed Insurance Contracts			Total
Balance at December 31, 2017	$	—		$	137		$	7		$	100		$	244
Purchases	—			22			—			1			23
Sales	—			(1		)	—			(6		)	(7		)
Realized losses	(4		)	—			—			—			—
Unrealized gains (losses)	4			62			(4		)	—			58
Currency translation	—			(10		)	3			(3		)	(10		)
Balance at December 31, 2018	$	—		$	210		$	6		$	92		$	308
Purchases	5			—			—			2			2
Sales	—			—			(5		)	(4		)	(9		)
Unrealized gains	—			9			4			2			15
Currency translation	—			—			—			(2		)	(2		)
Balance at December 31, 2019	$	5		$	219		$	5		$	90		$	314

Schedule of allocation of plan assets

The target asset allocations for our worldwide defined benefit pension plans were:



	2019		2018
	U.S.	Non-U.S.	U.S.	Non-U.S.
Equity investments	23%	14%	12%	13%
Fixed income investments	61%	46%	73%	46%
Real estate	6%	5%	3%	6%
Private equity/venture capital	8%	24%	6%	24%
Other	2%	11%	6%	11%
Total Investment Strategy	100%	100%	100%	100%

Defined benefit and retiree health pension plans, actual and expected cash contributions

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



	Year Ended December 31,
	2019		Estimated 2020
U.S. Plans	$	26	$	25
Non-U.S. Plans	115		110
Total	$	141	$	135

Retiree Health	$	30	$	35

The 2019 U.S. pension plan contributions did not include any contributions for our domestic tax-qualified defined benefit plans because none were required to meet the minimum funding requirements. There are no contributions required in 2020 for our U.S. tax-qualified defined benefit plans to meet the minimum funding requirements.

Schedule of expected benefit payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following years:



	Pension Benefits
	U.S.		Non-U.S.		Total		Retiree Health
2020	$	480	$	266	$	746	$	35
2021	262		272		534		32
2022	269		277		546		31
2023	272		283		555		29
2024	264		289		553		28
Years 2025-2029	1,198		1,526		2,724		118

Schedule of assumptions used

Weighted-average assumptions used to determine benefit obligations at the plan measurement dates:



	Pension Benefits
	2019				2018				2017
	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Discount rate	3.1	%	1.8	%	4.2	%	2.6	%	3.6	%	2.3	%
Rate of compensation increase	0.2	%	2.6	%	0.2	%	2.6	%	0.2	%	2.6	%
Interest crediting rate	2.8	%	1.5	%	2.8	%	1.5	%	2.8	%	1.5	%



	Retiree Health
	2019		2018		2017
Discount rate	3.0	%	4.1	%	3.5	%

Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:



	Pension Benefits
	2020				2019				2018				2017
	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Discount rate	3.1	%	1.8	%	4.2	%	2.6	%	3.6	%	2.3	%	4.0	%	2.5	%
Expected return on plan assets	6.0	%	3.3	%	6.0	%	4.0	%	5.8	%	3.8	%	7.0	%	4.1	%
Rate of compensation increase	0.2	%	2.6	%	0.2	%	2.6	%	0.2	%	2.6	%	0.2	%	2.6	%
Interest crediting rate	2.8	%	1.5	%	2.8	%	1.5	%	2.8	%	1.5	%	2.8	%	1.5	%



	Retiree Health
	2020		2019		2018		2017
Discount rate	3.0	%	4.1	%	3.5	%	3.9	%

_____________

Note: Expected return on plan assets is not applicable to retiree health benefits as these plans are not funded. Rate of compensation increase is not applicable to retiree health benefits as compensation levels do not impact earned benefits.

Schedule of health care cost trend rates

Assumed health care cost trend rates were as follows:



	December 31,
	2019		2018
Health care cost trend rate assumed for next year	6.0	%	6.3	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.3	%	4.7	%
Year that the rate reaches the ultimate trend rate	2026		2025

Inventories and Equipment on Operating Leases, Net (Tables)

12 Months Ended

Dec. 31, 2019

Inventories and Equipment on Operating Leases, Net [Abstract]

Schedule of inventories by major category

The following is a summary of Inventories by major category:



	December 31,
	2019		2018
Finished goods	$	576	$	710
Work-in-process	47		49
Raw materials	71		70
Total Inventories	$	694	$	829

Schedule of property subject to or available for operating lease

Equipment on operating leases and the related accumulated depreciation were as follows:



	December 31,
	2019			2018
Equipment on operating leases	$	1,443		$	1,519
Accumulated depreciation	(1,079		)	(1,077		)
Equipment on operating leases, net	$	364		$	442

Schedule of future minimum rental payments for operating leases

Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows:



	December 31, 2018
2019	$	114
2020	88
2021	64
2022	50
2023	36
Thereafter	27
Total Operating lease commitments	$	379

Estimated minimum future revenues associated with Equipment on operating leases are as follows:



	December 31,
	2019		2018
12 months	$	226	$	260
24 months	139		178
36 months	84		111
48 months	39		61
60 months	12		21
Thereafter	2		2
Total	$	502	$	633

y. Refer to Note 2 - Adoption of New Leasing Standard - Lessee for additional information regarding leased assets.

Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Basic and diluted earnings per share

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



	Year Ended December 31,
	2019			2018			2017
Basic Earnings per Share:
Net Income from continuing operations attributable to Xerox Holdings	$	648		$	306		$	66
Accrued dividends on preferred stock	(14		)	(14		)	(14		)
Adjusted Net income from continuing operations available to common shareholders	634			292			52
Income from discontinued operations attributable to Xerox Holdings, net of tax	705			55			129
Adjusted Net income available to common shareholders	$	1,339		$	347		$	181
Weighted-average common shares outstanding	221,969			248,707			254,341
Basic Earnings per Share:
Continuing operations	$	2.86		$	1.17		$	0.20
Discontinued operations	3.17			0.23			0.51
Basic Earnings per Share	$	6.03		$	1.40		$	0.71

Diluted Earnings per Share:
Net Income from continuing operations attributable to Xerox Holdings	$	648		$	306		$	66
Accrued dividends on preferred stock	—			(14		)	(14		)
Adjusted Net income from continuing operations available to common shareholders	648			292			52
Income from discontinued operations attributable to Xerox Holdings, net of tax	705			55			129
Adjusted Net income available to common shareholders	$	1,353		$	347		$	181
Weighted-average common shares outstanding	221,969			248,707			254,341
Common shares issuable with respect to:
Stock options	55			—			—
Restricted stock and performance shares	4,403			2,953			2,229
Convertible preferred stock	6,742			—			—
Adjusted Weighted average common shares outstanding	233,169			251,660			256,570

Diluted Earnings per Share:
Continuing operations	$	2.78		$	1.16		$	0.20
Discontinued operations	3.02			0.22			0.51
Diluted Earnings per Share	$	5.80		$	1.38		$	0.71

The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands):
Stock options	805			1,022			—
Restricted stock and performance shares	1,272			3,068			3,706
Convertible preferred stock	—			6,742			6,742
Total Anti-Dilutive Securities	2,077			10,832			10,448

Dividends per Common Share	$	1.00		$	1.00		$	1.00

Revenue - Disaggregation of Revenue (Details) - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

$ 9,066

$ 9,662

$ 9,991

Equipment

Supplies, paper and other sales

2,062

2,178

2,152

1,165

1,276

1,260

Maintenance agreements

2,372

2,603

2,809

Service arrangements

2,517

2,674

2,722

Rental and other

706

663

754

Financing

244

268

294

Sales | Sales channels, direct equipment lease

^[1]

3,227

3,454

3,412

Sales | Sales channels, distributors and resellers

672

699

718

Sales | Sales channels, customer direct

1,343

1,445

1,502

1,212

1,310

1,192

Service

^[1]

5,595

5,940

6,285

United States

5,429

5,610

5,790

Europe

2,326

2,625

2,697

Canada

518

569

648

Other

Accounting Standards Update 2014-09 | Sales

$ 793

$ 858

856

Accounting Standards Update 2014-09 | Service

Land, Buildings and Equipment, Net [Abstract]

$ 44

[1]	Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information.

Financial Instruments - Terminated Swaps (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Amortization of fair value adjustments for terminated swaps	$ 1	$ 3	$ 13
Unamortized balance of fair value adjustments - terminated swaps	$ 1

Land, Buildings, Equipment and Software, Net

12 Months Ended

Dec. 31, 2019

Land, Buildings, Equipment and Software, Net

Land, buildings and equipment, net were as follows:



		December 31,
	Estimated Useful Lives (Years)	2019			2018
Land		$	12		$	12
Building and building equipment	25 to 50	794			793
Leasehold improvements	Varies	135			178
Plant machinery	5 to 12	1,124			1,143
Office furniture and equipment	3 to 15	565			607
Other	4 to 20	45			45
Construction in progress		23			26
Subtotal		2,698			2,804
Accumulated depreciation		(2,272		)	(2,306		)
Land, buildings and equipment, net		$	426		$	498

Depreciation expense was $101, $148 and $136 for the three years ended December 31, 2019, 2018 and 2017, respectively.

We lease buildings and equipment, substantially all of which are accounted for as operating leases. Finance leased assets were $7 and $9 at December 31, 2019 and 2018, respectively. Refer to Note 2 - Adoption of New Leasing Standard - Lessee for additional information regarding leased assets.

Internal Use Software

As of December 31, 2019 and 2018, capitalized costs related to internal use software, net of accumulated amortization, were $122 and $154, respectively. Useful lives of our internal use software generally vary from three to seven years.

Finance Receivables, Net - Finance Receivables and Maturities (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Receivables [Abstract]
Gross receivables	$ 3,865	$ 4,003
Unearned income	(425)	(439)
Financing receivables, before allowance for credit loss	3,440	3,564
Residual values	0	0
Allowance for doubtful accounts	(89)	(92)	$ (108)
Finance Receivables, Net	3,351	3,472
Less: Billed portion of finance receivables, net	111	105
Less: Current portion of finance receivables not billed, net	1,158	1,218
Finance Receivables Due After One Year, Net	2,082	2,149
Finance receivables contractual maturity, current	1,490	1,543
Finance receivables contractual maturity, in two years	1,052	1,108
Finance receivables contractual maturities, in three years	728	755
Finance receivables contractual maturities, in four years	422	425
Finance receivables contractual maturities, in five years	158	158
Finance receivables contractual maturities, thereafter	15	14
Total contractual maturities of gross receivables	3,865	4,003
Billed contractual maturities of gross finance receivables	$ 115	$ 107

Financial Instruments - Summary of Derivative Instruments Gain (Losses) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of cash flow hedges gains (losses), pre-tax	$ 2,000,000	$ 9,000,000	$ (28,000,000)
Other unrealized (losses) gains, net	(2,000,000)	4,000,000	(12,000,000)
Foreign currency transaction gain (loss), before tax	7,000,000	(5,000,000)	(4,000,000)
Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, gain (loss) on derivative, net	0	0	0
Cash Flow Hedging \| Foreign currency gain (loss)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, gain (loss) on derivative, net	0
Underlying Derivative Exposure \| Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, gain (loss) on derivative, net	0	0	0
Interest Rate Contract \| Fair Value Hedging \| Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, gain (loss) on derivative, net	4,000,000	(3,000,000)	(3,000,000)
Hedged item gain (loss) recognized in income	(4,000,000)	3,000,000	3,000,000
Foreign exchange contracts – forwards \| Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of cash flow hedges gains (losses), pre-tax	2,000,000	9,000,000	(28,000,000)
Foreign exchange contracts – forwards \| Cash Flow Hedging \| Cost of sales
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) reclassified from AOCI to income	9,000,000	(14,000,000)	(35,000,000)
Foreign exchange contracts – forwards \| Derivatives NOT Designated as Hedging Instruments \| Foreign currency gain (loss)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, gain (loss) on derivative, net	$ 6,000,000	$ (21,000,000)	$ 44,000,000

Income and Other Taxes - Deferred Tax Asset and Liability (Details) - USD ($) $ in Millions	12 Months Ended			36 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 1986
Deferred Tax Assets And Liabilities [Line Items]
Research and development	$ 143	$ 252		$ 143
Post-retirement medical benefits	98	99		98
Net operating losses	389	389		389
Operating reserves, accruals and deferrals	95	138		95
Tax credit carryforwards	239	254		239
Deferred and share-based compensation	26	32		26
Pension	298	266		298
Depreciation	9	90		9
Operating lease liabilities	347			347
Other	62	46		62
Subtotal	1,706	1,566		1,706
Valuation allowance	(399)	(397)		(399)
Total	1,307	1,169		1,307
Finance lease and installment sales	243	291		243
Intangibles and goodwill	128	129		128
Unremitted earnings of foreign subsidiaries	39	59		39
Operating lease ROU assets	319			319
Other	17	1		17
Total	746	480		746
Total Deferred Taxes, Net	561	689		561
Deferred tax assets	598	740		598
Valuation allowance, increase (decrease) in amount	2	(38)	$ 19
Tax credit carryforwards	239			239
Carryforwards with no expiration
Deferred Tax Assets And Liabilities [Line Items]
Tax credit carryforwards	1			1
Deferred tax assets, operating loss carryforwards, not subject to expiration	1,700			1,700
Carryforwards that expire
Deferred Tax Assets And Liabilities [Line Items]
Tax credit carryforwards	238			238
Operating loss carryforwards	522			522
Other long-term liabilities
Deferred Tax Assets And Liabilities [Line Items]
Deferred tax liabilities	(37)	(51)		(37)
Accounting Standards Update 2018-05
Deferred Tax Assets And Liabilities [Line Items]
Tax cuts and jobs act, incomplete accounting, provisional income tax expense (benefit)	$ (35)	89	$ 400	454
Statutory income tax rate, inclusive of state taxes	25.00%
Undistributed Earnings of Foreign Subsidiaries		1,500			$ 350
Accounting Standards Update 2018-05 \| Deemed repatriation tax
Deferred Tax Assets And Liabilities [Line Items]
Tax cuts and jobs act, incomplete accounting, provisional income tax expense (benefit)	$ 164
Accounting Standards Update 2018-05 \| Other tax liabilities and adjustments
Deferred Tax Assets And Liabilities [Line Items]
Tax cuts and jobs act, incomplete accounting, provisional income tax expense (benefit)	99
Accounting Standards Update 2018-05 \| Deferred tax asset
Deferred Tax Assets And Liabilities [Line Items]
Tax cuts and jobs act, incomplete accounting, provisional income tax expense (benefit)	191
Xerox Corporation
Deferred Tax Assets And Liabilities [Line Items]
Deferred tax assets	$ 598	$ 740		$ 598

Earnings per Share - Anti-Dilutive Securities (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Anti-Dilutive Securities	2,077	10,832	10,448
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Anti-Dilutive Securities	805	1,022	0
Restricted stock and performance shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Anti-Dilutive Securities	1,272	3,068	3,706
Convertible preferred stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Anti-Dilutive Securities	0	6,742	6,742

Land, Buildings, Equipment and Software, Net (Tables)

12 Months Ended

Dec. 31, 2019

Land, Buildings and Equipment, Net [Abstract]

Land, buildings and equipment, net

Land, buildings and equipment, net were as follows:



		December 31,
	Estimated Useful Lives (Years)	2019			2018
Land		$	12		$	12
Building and building equipment	25 to 50	794			793
Leasehold improvements	Varies	135			178
Plant machinery	5 to 12	1,124			1,143
Office furniture and equipment	3 to 15	565			607
Other	4 to 20	45			45
Construction in progress		23			26
Subtotal		2,698			2,804
Accumulated depreciation		(2,272		)	(2,306		)
Land, buildings and equipment, net		$	426		$	498

Land, buildings and equipment depreciation expense

Depreciation expense was $101, $148 and $136 for the three years ended December 31, 2019, 2018 and 2017, respectively.

Schedule of future minimum rental payments for operating leases

Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows:



	December 31, 2018
2019	$	114
2020	88
2021	64
2022	50
2023	36
Thereafter	27
Total Operating lease commitments	$	379

Estimated minimum future revenues associated with Equipment on operating leases are as follows:



	December 31,
	2019		2018
12 months	$	226	$	260
24 months	139		178
36 months	84		111
48 months	39		61
60 months	12		21
Thereafter	2		2
Total	$	502	$	633

y. Refer to Note 2 - Adoption of New Leasing Standard - Lessee for additional information regarding leased assets.

Inventories and Equipment on Operating Leases, Net (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Inventories, net [Abstract]
Finished goods	$ 576	$ 710
Work-in-process	47	49
Raw materials	71	70
Total Inventories	694	829
Inventories and Equipment on Operating Lease, Net [Abstract]
Equipment on operating leases		1,519
Accumulated depreciation		(1,077)
Equipment on operating leases, net	364	442
Property Subject to or Available for Operating Lease [Line Items]
Equipment on operating leases		2,804
Accumulated depreciation		(2,306)
Land, buildings and equipment, net		498
Contingent rental revenue on operating leases	107	120	$ 119
Operating Leases, Future Minimum Payments Receivable [Abstract]
12 months	226
12 months		260
24 months	139
24 months		178
36 months	84
36 months		111
48 months	39
48 months		61
60 months	12
60 months		21
Thereafter	2
Thereafter		2
Total	$ 502
Total		$ 633
Minimum
Property Subject to or Available for Operating Lease [Line Items]
Equipment on operating lease depreciable lives	3 years
Maximum
Property Subject to or Available for Operating Lease [Line Items]
Equipment on operating lease depreciable lives	5 years
Assets Leased to Others
Property Subject to or Available for Operating Lease [Line Items]
Equipment on operating leases	$ 1,443
Accumulated depreciation	(1,079)
Land, buildings and equipment, net	$ 364

Shareholders' Equity - Common Stock and Treasury Stock Period Activity (Details) - $ / shares	5 Months Ended	7 Months Ended	12 Months Ended
	Dec. 31, 2019	Jul. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Aug. 01, 2019
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, authorized (shares)	437,500,000		437,500,000
Par value of common stock (dollars per share)						$ 1
Common stock issued (shares)	214,621,000		214,621,000	231,690,000
Common stock outstanding (shares)	212,590,000		212,590,000	229,623,000
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, Beginning		231,690,000	231,690,000	254,613,000	253,594,000
Stock based compensation plans, net			1,310,000	1,103,000	1,019,000
Acquisition of Treasury stock			0	0
Cancellation of Treasury stock			(18,379,000)	(24,026,000)
Balance, Ending	214,621,000		214,621,000	231,690,000	254,613,000
Treasury Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, Beginning		2,067,000	2,067,000	0	0
Stock based compensation plans, net			0	0	0
Acquisition of Treasury stock	9,097,000	35,339,000	18,343,000	26,093,000
Cancellation of Treasury stock			(18,379,000)	(24,026,000)
Balance, Ending	2,031,000		2,031,000	2,067,000	0
Xerox Corporation
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, authorized (shares)	1,000,000		1,000,000
Par value of common stock (dollars per share)	$ 1.00		$ 1.00
Common stock issued (shares)	100,000		100,000
Common stock outstanding (shares)	100,000		100,000

Goodwill and Intangible Assets, Net - Goodwill (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Goodwill [Roll Forward]
Beginning Balance, Goodwill	$ (3,858)	$ (3,921)	$ (3,778)
Foreign currency translation	28	(63)	105
Goodwill acquired during period	14
Divestiture			(6)
Ending Balance, Goodwill	$ (3,900)	$ (3,858)	(3,921)
MT Business
Goodwill [Roll Forward]
Goodwill acquired during period			33
Other
Goodwill [Roll Forward]
Goodwill acquired during period			11
Restatement Adjustment
Goodwill [Roll Forward]
Beginning Balance, Goodwill			$ 9

Acquisitions

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Acquisitions

2019 Acquisitions

Xerox continues to focus on further penetrating the small-to-medium sized business (SMB) market through organic and inorganic growth, which includes acquisitions of local area resellers and partners (including multi-brand dealers). During 2019, business acquisitions totaled $38 and included Rabbit Office Automation (ROA), a San Francisco Bay area dealer, and Heritage Business Systems, Inc. (HBS), a Delaware Valley dealer. The acquisition of these dealers expands our distribution capabilities of office technology sales, services and supplies to SMB customers in these markets. 2019 acquisitions also include $4 related to an acquisition of assets.

2019 Summary

All of our 2019 acquisitions resulted in 100% ownership of the acquired companies. The operating results of these acquisitions are not material to our financial statements and are included within our results from the respective acquisition dates. The purchase prices were all cash and were primarily allocated to Intangible assets, net and Goodwill. Of the goodwill recorded in 2019, 100% is expected to be deductible for tax purposes. Our 2019 acquisitions contributed aggregate revenues of approximately $18 to our 2019 total revenues from their respective acquisition dates.

The following table summarizes the purchase price allocations for our 2019 acquisitions as of the acquisition dates:



	Weighted-Average Life (Years)	Total 2019 Acquisitions
Accounts/finance receivables		$	3
Intangible assets:
Customer relationships	10	19
Trademarks	5	2
Goodwill		14
Other assets		3
Total Assets acquired		41
Liabilities assumed		(3		)
Total Purchase Price		$	38

2018 Acquisitions

There were no business acquisitions in 2018.

2017 Acquisitions

Business acquisitions in 2017 totaled $87, in cash, and included the acquisition of MT Business Technologies, Inc. (MT Business), an Ohio-based multi-brand dealer, and two smaller multi-brand dealers in Iowa and North and South Carolina. The acquisitions in 2017 were part of the strategy to increase our SMB coverage through resellers and partners (including multi-brand dealers) and continued distribution acquisitions.

2017 Summary

All of our 2017 acquisitions resulted in 100% ownership of the acquired companies. The operating results of the 2017 acquisitions described above are not material to our financial statements and were included within our results from the respective acquisition dates. The purchase prices for these acquisitions were primarily allocated to Intangible assets, net and Goodwill based on third-party valuations and management's estimates. The primary elements that generated the goodwill are the value of synergies and the acquired assembled workforce. Refer to Note 13 - Goodwill and Intangible Assets, Net for additional information. Our 2017 acquisitions contributed aggregate revenues from their respective acquisition dates of approximately $76, $79 and $54 to our 2019, 2018 and 2017 total revenues, respectively.

Land, Buildings, Equipment and Software, Net (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Land, Building and Equipment, net [Line Items]
Equipment on operating leases		$ 2,804
Land, buildings, and equipment	$ 2,698
Accumulated depreciation	(2,272)
Accumulated depreciation		(2,306)
Land, buildings and equipment, net	426
Land, buildings and equipment, net		498
Depreciation expense	101	148	$ 136
Finance leased assets	7
Finance leased assets		9
Land
Land, Building and Equipment, net [Line Items]
Equipment on operating leases		12
Land, buildings, and equipment	12
Building and building equipment
Land, Building and Equipment, net [Line Items]
Equipment on operating leases		793
Land, buildings, and equipment	794
Leasehold improvements
Land, Building and Equipment, net [Line Items]
Equipment on operating leases		178
Land, buildings, and equipment	135
Plant machinery
Land, Building and Equipment, net [Line Items]
Equipment on operating leases		1,143
Land, buildings, and equipment	1,124
Office furniture and equipment
Land, Building and Equipment, net [Line Items]
Equipment on operating leases		607
Land, buildings, and equipment	565
Other
Land, Building and Equipment, net [Line Items]
Equipment on operating leases		45
Land, buildings, and equipment	45
Construction in progress
Land, Building and Equipment, net [Line Items]
Equipment on operating leases		$ 26
Land, buildings, and equipment	$ 23
Minimum
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	3 years
Minimum \| Building and building equipment
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	25 years
Minimum \| Plant machinery
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	5 years
Minimum \| Office furniture and equipment
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	3 years
Minimum \| Other
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	4 years
Maximum
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	5 years
Maximum \| Building and building equipment
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	50 years
Maximum \| Plant machinery
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	12 years
Maximum \| Office furniture and equipment
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	15 years
Maximum \| Other
Land, Building and Equipment, net [Line Items]
Estimated Useful Lives (Years)	20 years

Divestitures - Discontinued Operations - Balance Sheet (Details) - USD ($) $ in Millions	Dec. 31, 2019	Nov. 30, 2019	Dec. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total current assets	$ 0		$ 19
Total current liabilities	$ 0		21
Fuji Xerox Co., Ltd. and Xerox International Partners, The Sales \| Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash and cash equivalents		$ 1	3
Accounts receivable, net		3	6
Inventories		5	7
Other current assets		0	3
Total current assets		9	19
Land, building and equipment, net		1
Land, building and equipment, net			1
Goodwill		9	9
Other long-term assets		1,471	1,342
Total Assets of discontinued operations		1,490	1,371
Accounts payable		8	18
Accrued compensation and benefits costs		1	1
Accrued expenses and other current liabilities		2	2
Total current liabilities		11	21
Other long-term liabilities		1	0
Total Liabilities of discontinued operations		$ 12	$ 21

Restructuring Programs

12 Months Ended

Dec. 31, 2019

Restructuring and Related Activities [Abstract]

Restructuring Programs

We engage in restructuring actions, including Project Own It, as well as other transformation efforts in order to reduce our cost structure and realign it to the changing nature of our business. As part of our efforts to reduce costs, our restructuring actions may also include the off-shoring or outsourcing of certain operations, services and other functions.

Restructuring costs include employee severance and related costs, other contractual termination costs and asset impairments that may result from employee reductions, migration of facilities from higher-cost to lower-cost countries, and the consolidation of facilities within countries. In those geographies where we have either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan (on-going benefit arrangements), we recognize employee severance and related costs when they are both probable and reasonably estimable. In the event employees are required to perform future service beyond their minimum retention period, we record severance charges ratably over the remaining service period of those employees. Severance payments made under a one-time benefit arrangement are recorded upon communication to the affected employees. Contractual termination costs, including facility exit costs, are generally recognized when it has been determined that a liability has been incurred. Restructuring activities may include the disposal or abandonment of assets, including leased right-of-use assets, that require an acceleration of depreciation or an impairment charge reflecting the excess of an asset's book value over fair value or other recoveries.

The recognition of restructuring costs requires that we make certain judgments and estimates regarding the nature, timing and amount of costs associated with the planned initiative. To the extent our actual results differ from our estimates and assumptions, we may be required to revise the estimated liabilities, requiring the recognition of additional restructuring costs or the reduction of liabilities already recognized. At the end of each reporting period, we evaluate the remaining accrued balances to ensure these balances are properly stated and the utilization of the reserves are for their intended purpose in accordance with developed exit plans.

A summary of our restructuring program activity for the three years ended December 31, 2019, 2018 and 2017 is as follows:



	Severance and Related Costs			Other Contractual Termination Costs⁽²⁾			Asset Impairments⁽³⁾⁽⁴⁾			Total
Balance at December 31, 2016	$	104		$	23		$	—		$	127
Restructuring provision	221			4			7			232
Reversals of prior charges	(29		)	(6		)	—			(35		)
Net Current Period Charges⁽¹⁾	192			(2		)	7			197
Charges against reserve and currency	(188		)	(20		)	(7		)	(215		)
Balance at December 31, 2017	$	108		$	1		$	—		$	109
Restructuring provision	175			14			—			189
Reversals of prior charges	(33		)	—			—			(33		)
Net Current Period Charges⁽¹⁾	142			14			—			156
Charges against reserve and currency	(156		)	(14		)	—			(170		)
Balance at December 31, 2018	$	94		$	1		$	—		$	95
Restructuring provision	81			19			61			161
Reversals of prior charges	(24		)	(5		)	(5		)	(34		)
Net Current Period Charges⁽¹⁾	57			14			56			127
Charges against reserve and currency	(85		)	(11		)	(56		)	(152		)
Balance at December 31, 2019	$	66		$	4		$	—		$	70

_____________


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


(2)	Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs.


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


(4)	2019 amounts primarily relate to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $39 for leased right-of-use assets and $22 for owned assets and are net of any potential sublease income or other recovery amounts.

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



	Year Ended December 31,
	2019			2018			2017
Charges against reserve and currency	$	(152	)	$	(170	)	$	(215	)
Asset impairments	56			—			7
Effects of foreign currency and other non-cash items	3			1			(12		)
Restructuring Cash Payments	$	(93	)	$	(169	)	$	(220	)

In connection with our restructuring programs, we also incurred certain related costs as follows:



	Year Ended December 31, 2019
Retention related severance/bonuses⁽¹⁾	$	39
Contractual severance costs⁽²⁾	43
Consulting and other costs⁽³⁾	20
	$	102

_____________


(1)	Includes retention related severance and bonuses for employees expected to continue working beyond their minimum retention period before termination.


(2)	Reflects estimated severance and other related costs we are contractually required to pay on employees transferred (approximately 2,200) as part of the shared service arrangement entered into with HCL Technologies.


(3)	Represents professional support services associated with our business transformation initiatives.

Cash payments for restructuring related costs were approximately $65 in 2019 and the reserve at December 31, 2019 was $37, which is expected to be paid over the next twelve months.

Investment in Affiliates, at Equity - Condensed Financial Data for Fuji Xerox Unconsolidated Affiliate (Details) - Fuji Xerox - USD ($) $ in Millions	11 Months Ended	12 Months Ended
	Nov. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Summary of Operations
Revenues	$ 7,667	$ 9,161	$ 9,638
Costs and expenses	6,814	8,880	9,072
Income before income taxes	853	281	566
Income tax expense	258	160	144
Net Income	595	121	422
Less: Net income - noncontrolling interests	3	2	5
Net Income - Fuji Xerox	592	119	417
Assets:
Current assets	4,876	4,179	4,315
Long-term assets	3,964	4,034	4,488
Total Assets	8,840	8,213	8,803
Liabilities and Equity:
Short-term debt	49	130	428
Other current liabilities	1,932	1,827	2,079
Long-term debt	16	24	76
Other long-term liabilities	514	395	369
Noncontrolling interests	18	30	33
Fuji Xerox shareholders' equity	6,311	5,807	5,818
Total Liabilities and Equity	$ 8,840	$ 8,213	$ 8,803

Divestitures

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

Discontinued Operations

Sales of Ownership Interests in Fuji Xerox Co., Ltd. and Xerox International Partners

In November 2019, Xerox Holdings completed a series of transactions to restructure its relationship with FUJIFILM Holdings Corporation (FH), including the sale of its indirect 25% equity interest in Fuji Xerox (FX) for approximately $2.2 billion as well as the sale of its indirect 51% partnership interest in Xerox International Partners (XIP) for approximately $23 (collectively the Sales).

As a result of the Sales and the related strategic shift in our business, the historical financial results of our equity method investment in FX and our XIP business (which was consolidated) for the periods prior to the Sales are reflected as a discontinued operation and as such, their impact is excluded from continuing operations for all periods presented.

The Sales resulted in a pre-tax gain of $629 ($539 after-tax), and included a reclassification from Accumulated other comprehensive loss of $165 (Refer to Note 25 - Other Comprehensive (Loss) Income) as well as approximately $9 of transaction costs and $9 of allocated goodwill associated with our XIP business (Refer to Note 13 - Goodwill and Intangible Assets, Net). The XIP allocated goodwill was based on the relative fair value of our XIP business, as evidenced by the sales price, as compared to the total estimated fair value of Xerox. No Goodwill was allocated for our investment in FX based on consideration of the guidance in ASC 350-20-40-2 and the fact that an equity investment is not considered a business in accordance with ASC 805-10-55, as it was not controlled by Xerox.

The transactions with FH also included an OEM license agreement by and between FX and Xerox, granting FX the right to use specific Xerox Intellectual Property (IP) in providing certain named original equipment manufacturers (OEM’s) with products (such as printer engines) in exchange for a one-time upfront license fee of $77. The license fee is recorded within Rental and other revenues. In addition, arrangements with FX whereby we purchase inventory from and sell inventory to FX, will continue after the Sales and, as a result of our Technology Agreement with Fuji Xerox which remains in effect after the Sales through March 2021, we will continue to receive royalty payments for FX’s use of our Xerox brand trademark, as well as rights to access our patent portfolio in exchange for access to their patent portfolio.

Refer to Note 12 - Investment in Affiliates, at Equity, for additional information on transactions with FX as well as Note 27 - Subsequent Events for additional information regarding our Technology Agreement with FX.

Business Process Outsourcing (BPO)

On December 31, 2016, Xerox completed the Separation of its BPO business through the Distribution of all of the issued and outstanding stock of Conduent Incorporated to Xerox Corporation stockholders. As a result of the Separation and Distribution, the financial position and results of operations of the BPO Business were presented as Discontinued Operations. Discontinued Operations for the year ended December 31, 2017 include immaterial follow-on impacts from the BPO separation - see note (1) to table below.

In connection with the Separation, Conduent made a net cash distribution to Xerox of approximately $1.8 billion prior to the Distribution Date. Xerox used a portion of the cash distribution proceeds to repay the $1.0 billion Senior Unsecured Term Facility in January 2017, which was required to be repaid upon completion of the Separation.

Summarized financial information for our Discontinued Operations is as follows:



	Year Ended December 31,
	2019		2018		2017
Revenue	$	79	$	168	$	274

Income from operations⁽¹⁾	$	176	$	74	$	138
Gain on disposal	629		—		—
Income before income taxes	805		74		138
Income tax expense⁽¹⁾	95		10		1
Income from discontinued operations, net of tax	710		64		137
Income from discontinued operations attributable to noncontrolling interests, net of tax	5		9		8
Income from discontinued operations, attributable to Xerox, net of tax⁽¹⁾	$	705	$	55	$	129

_____________


(1)	2017 Income from discontinued operations, net of tax, attributable to Xerox includes $3 related to the BPO separation, that includes a loss from operations of $(9) and income tax benefit of $12 with both amounts primarily related to changes in estimated amounts recorded in 2016.

The following is a summary of selected financial information for our Discontinued Operations:



	Year Ended December 31,
	2019		2018		2017
Cost and Expenses:
Cost of revenues	$	44	$	110	$	218
Other expenses	6		9		20
Total Costs and Expenses	$	50	$	119	$	238
Selected amounts included in Costs and Expenses:
Depreciation and amortization	$	—	$	—	$	1
Restructuring and related costs	—		1		—
Other:
Equity in net income of FX	$	147	$	25	$	102
Net income attributable to noncontrolling interest - XIP	5		9		8
Capital expenditures	—		—		—

The following is a summary of the major categories of assets and liabilities of XIP and our Investment in FX as of the date of sale. The balances as of December 31, 2018 are included in Assets and Liabilities of discontinued operations in the Consolidated Balance Sheets:



	At Date of Sale		December 31, 2018
Assets
Cash and cash equivalents	$	1	$	3
Accounts receivable, net	3		6
Inventories	5		7
Other current assets	—		3
Total current assets	9		19
Land, building and equipment, net	1		1
Goodwill	9		9
Other long-term assets	1,471		1,342
Total Assets of discontinued operations	$	1,490	$	1,371

Liabilities
Accounts payable	$	8	$	18
Accrued compensation and benefits costs	1		1
Accrued expenses and other current liabilities	2		2
Total current liabilities	11		21
Other long-term liabilities	1		—
Total Liabilities of discontinued operations	$	12	$	21

XIP had noncontrolling interests of $32 at the date of sale and $36 at December 31, 2018. Refer to Note 12 - Investments in Affiliates, at Equity for additional information regarding FX, including summarized financial information of FX.

Other Divestitures

Xerox Research Centre Europe in Grenoble

In August 2017, we completed the sale of the Xerox Research Centre Europe in Grenoble, France to Naver Corporation (Naver). The selling price was approximately $23 and resulted in a pre-tax gain of $13 ($4 after-tax), which is included in Other expenses, net in the Consolidated Statements of Income for the year ended December 31, 2017. The sale included the transfer of approximately 80 researchers and administrative staff who became part of Naver.

Acquisitions (Details)	12 Months Ended
Acquisitions (Details)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($) business
Schedule of Business Acquisitions, by Acquisition [Line Items]
Payments to acquire business	$ 42,000,000	$ 0	$ 87,000,000
Payments to acquire assets	4,000,000
ROA and HBS
Schedule of Business Acquisitions, by Acquisition [Line Items]
Payments to acquire business	$ 38,000,000
2019 Acquisitions
Schedule of Business Acquisitions, by Acquisition [Line Items]
Percentage of business acquired	100.00%
Percentage of goodwill expected to be deductible	100.00%
Revenue of acquiree since date of acquisition	$ 18,000,000
2018 Acquisitions
Schedule of Business Acquisitions, by Acquisition [Line Items]
Payments to acquire business		0
XBS
Schedule of Business Acquisitions, by Acquisition [Line Items]
Payments to acquire business			$ 87,000,000
Number of businesses acquired \| business			2
Percentage of business acquired			100.00%
Revenue of acquiree since date of acquisition	$ 76,000,000	$ 79,000,000	$ 54,000,000

Fair Value of Financial Assets and Liabilities - Nonrecurring (Details) - Fair Value, Nonrecurring - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	$ 2,740	$ 1,081
Accounts receivable, net	1,236	1,270
Short-term debt and current portion of long-term debt	1,049	961
Long-term debt	3,233	4,269
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	2,740	1,081
Accounts receivable, net	1,236	1,270
Short-term debt and current portion of long-term debt	1,054	966
Long-term debt	$ 3,331	$ 3,922

Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of fair value hedges

The following is a summary of our fair value hedges at December 31, 2019:



Debt Instrument	Year First Designated	Notional Amount		Net Fair Value		Weighted Average Interest Rate Paid		Interest Rate Received		Basis	Maturity
Senior Note 2021	2014	$	200	$	1	3.35	%	4.50	%	Libor	2021

Schedule of foreign exchange contracts gross notional values

The following is a summary of the primary hedging positions and corresponding fair values as of December 31, 2019:



Currencies Hedged (Buy/Sell)	Gross Notional Value		Fair Value Asset⁽¹⁾
Japanese Yen/U.S. Dollar	$	369	$	(2	)
Japanese Yen/Euro	264		(3		)
U.S. Dollar/Euro	122		—
Euro/U.S. Dollar	71		—
Euro/U.K. Pound Sterling	64		—
U.S. Dollar/Canadian Dollar	50		(1		)
Euro/Danish Krone	29		—
U.K. Pound Sterling/Euro	27		—
U.S. Dollar/Russian Ruble	22		(1		)
U.S. Dollar/Japanese Yen	14		—
Euro/Swiss Franc	12		—
U.S. Dollar/Israeli Shekel	9		—
All Other	38		1
Total Foreign exchange hedging	$	1,091	$	(6	)

____________

(1)

Represents the net receivable (payable) amount included in the Consolidated Balance Sheet at December 31, 2019.

Schedule of derivative instruments fair value

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



		December 31,
Designation of Derivatives	Balance Sheet Location	2019			2018
Derivatives Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	1		$	7
	Accrued expensed and other current liabilities	(5		)	—
Foreign currency options	Other current assets	—			1
Interest rate swaps	Other long-term assets	1			—
	Other long-term liabilities	—			(3		)
	Net Designated Derivative (Liability) Asset	$	(3	)	$	5

Derivatives NOT Designated as Hedging Instruments
Foreign exchange contracts – forwards	Other current assets	$	1		$	7
	Accrued expensed and other current liabilities	(3		)	(1		)
	Net Undesignated Derivative (Liability) Asset	$	(2	)	$	6

Summary of Derivatives	Total Derivative Assets	$	3		$	15
	Total Derivative Liabilities	(8		)	(4		)
	Net Derivative (Liability) Asset	$	(5	)	$	11

Schedule of fair value hedges gains (losses)

The following tables provide a summary of gains (losses) on derivative instruments:



		Year Ended December 31,
Derivatives in Fair Value Relationships	Location of Gain (Loss) Recognized in Income	Derivative Gain (Loss) Recognized in Income								Hedged Item (Loss) Gain Recognized in Income
Derivatives in Fair Value Relationships	Location of Gain (Loss) Recognized in Income	2019		2018			2017			2019			2018		2017
Interest rate contracts	Interest expense	$	4	$	(3	)	$	(3	)	$	(4	)	$	3	$	3

Schedule of cash flow hedges gain (loss)



	Year Ended December 31,
Derivatives in Cash Flow Hedging Relationships	Derivative Gain (Loss) Recognized in OCI (Effective Portion)							Location of Derivative Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI to Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	2019		2018		2017				2019		2018			2017
Foreign exchange contracts – forwards/options	$	2	$	9	$	(28	)	Cost of sales	$	9	$	(14	)	$	(35	)

Schedule of derivatives not designated as hedging instruments gains (losses)

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



		Year Ended December 31,
Derivatives NOT Designated as Hedging Instruments	Location of Derivative Gain (Loss)	2019			2018		2017
Foreign exchange contracts – forwards	Other expense – Currency (losses) gains, net	$	(6	)	$	21	$	(44	)

Adoption of New Leasing Standard - Lessor (Tables)

12 Months Ended

Dec. 31, 2019

Components of lease income

The components of lease income are as follows:



	Location in Statements of Income	Year Ended December 31,
	Location in Statements of Income	2019		2018
Lease income - sales type	Sales	$	672	$	699
Interest income on lease receivables	Financing	244		268
Lease income - operating leases	Services, maintenance and rentals	396		438
Variable lease income	Services, maintenance and rentals	107		120
Total Lease income		$	1,419	$	1,525

Components of lease income

The components of lease income are as follows:



	Location in Statements of Income	Year Ended December 31,
	Location in Statements of Income	2019		2018
Lease income - sales type	Sales	$	672	$	699
Interest income on lease receivables	Financing	244		268
Lease income - operating leases	Services, maintenance and rentals	396		438
Variable lease income	Services, maintenance and rentals	107		120
Total Lease income		$	1,419	$	1,525

Components of lease income

The components of lease income are as follows:



	Location in Statements of Income	Year Ended December 31,
	Location in Statements of Income	2019		2018
Lease income - sales type	Sales	$	672	$	699
Interest income on lease receivables	Financing	244		268
Lease income - operating leases	Services, maintenance and rentals	396		438
Variable lease income	Services, maintenance and rentals	107		120
Total Lease income		$	1,419	$	1,525

Debt - Interest (Details) - USD ($) $ in Millions	12 Months Ended
Debt - Interest (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Debt Disclosure [Abstract]
Interest paid	$ 221	$ 231	$ 268
Interest expense	236	244	252
Interest income	$ 260	$ 283	$ 302

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2019
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Committed Debt Financing for Proposed Transaction with HP Inc. On January 5, 2020, Xerox entered into a commitment letter (the “Commitment Letter”), with Citigroup Global Markets Inc., Mizuho Bank, Ltd. and Bank of America, N.A. (collectively, the “Commitment Parties”), pursuant to which, subject to the terms and conditions set forth therein, the Commitment Parties have committed to provide a $19.5 billion senior unsecured 364-day term loan bridge facility and a $4.5 billion senior unsecured 60-day term loan bridge facility to finance Xerox’s proposed acquisition of HP Inc. The 60-day term loan bridge facility is intended to bridge gaining access to cash on HP’s balance sheet that Xerox intends to use in a consensual transaction as a source of its acquisition financing. The funding of the debt facilities provided for in the Commitment Letter is contingent on the satisfaction of a limited number of customary conditions, including the consummation of the proposed acquisition of HP. Commitment and structuring fees up to $140 are payable on this funding commitment based on meeting certain milestones during the year with respect to the proposed transaction with HP. On January 6, 2020, Xerox issued a press release announcing that it has sent a letter to the Board of Directors of HP confirming that it has obtained $24 billion in binding financing commitments from Citi, Mizuho and Bank of America to complete its proposed business combination with HP. Termination of Technology Agreement with Fuji Xerox As disclosed in Note 12 - Investments in Affiliates, at Equity, Xerox has a Technology Agreement (TA) with Fuji Xerox whereby Xerox receives royalty payments for their use of our Xerox brand trademark, as well as rights to access our patent portfolio in exchange for access to their patent portfolio. On January 5, 2020, Fuji Xerox notified Xerox of its intention to terminate the TA on the agreement’s expiration date of March 31, 2021. The series of transactions entered into between Xerox and FH in November 2019, as disclosed in Note 7 - Divestitures, included an amendment to the TA that would allow Fuji Xerox continued use of the Xerox brand trademark for two years after the date of termination of the TA as it transitions to a new brand in exchange for an upfront prepaid fixed royalty of $100. The extended license is effective only if exercised by Fuji Xerox at the termination of the TA at which point payment would be required. If FX does not extend the license, Xerox would be allowed sell and distribute xerographic equipment under the Xerox brand in the Fuji Xerox territory as early as April 1, 2021; if Fuji Xerox extends the license, entry into the Fuji Xerox territory would be deferred to April 1, 2023. The product supply agreements with Fuji Xerox will continue to be effective despite the termination of the TA, and Fuji Xerox and Xerox will continue to operate as each other’s product supplier. Acquisition of Arena Group In January, Xerox acquired Arena Group, one of the leading providers of office technology, software, solutions and services in the U.K., for approximately $46 (GBP 35 million), which is net of cash acquired. This acquisition expands Xerox's presence in the small-to-medium sized (SMB) business market in Western Europe. We are currently assessing the purchase price allocation but expect the majority to be allocated to intangible assets and goodwill.

Financial Instruments - Fair Value Hedges (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Derivative notional value	$ 1,091
Senior Note 2021
Derivative [Line Items]
Derivative liability, notional amount	200	$ 300
Derivative, fair value, net	$ 1	$ (3)
Debt, weighted average interest rate (percentage)	3.35%
Debt instrument, interest rate, effective (percent)	4.50%
Interest rate swaps
Derivative [Line Items]
Derivative notional value, terminated early	$ 100

Finance Receivables, Net - Allowance for Credit Losses (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Financing Receivable, Allowance for Credit Loss [Line Items]
Finance receivable lease portfolio average maturity - low (years)	2 years
Finance receivable lease portfolio average maturity - high (years)	3 years
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for credit loss, beginning of period	$ 92	$ 108
Provision	28	24
Charge-offs	(34)	(41)
Recoveries and other	3	1
Allowance for credit loss, end of period	89	92
Finance Receivables Collectively Evaluated for Impairment	3,440	3,564
United States
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for credit loss, beginning of period	53	56
Provision	20	12
Charge-offs	(15)	(17)
Recoveries and other	1	2
Allowance for credit loss, end of period	59	53
Finance Receivables Collectively Evaluated for Impairment	1,922	1,946
Canada
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for credit loss, beginning of period	12	15
Provision	1	3
Charge-offs	(5)	(6)
Recoveries and other	2	0
Allowance for credit loss, end of period	10	12
Finance Receivables Collectively Evaluated for Impairment	320	335
Europe
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for credit loss, beginning of period	25	35
Provision	7	9
Charge-offs	(14)	(18)
Recoveries and other	0	(1)
Allowance for credit loss, end of period	18	25
Finance Receivables Collectively Evaluated for Impairment	1,155	1,239
Other
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for credit loss, beginning of period	2	2
Provision	0	0
Charge-offs	0	0
Recoveries and other	0	0
Allowance for credit loss, end of period	2	2
Finance Receivables Collectively Evaluated for Impairment	$ 43	$ 44

Debt - Credit Facility (Details) - USD ($)	3 Months Ended	12 Months Ended
Debt - Credit Facility (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
Line of credit facility, fair value of amount outstanding		$ 0	$ 0
Liens on Brazilian assets		0	$ 0
Commercial paper and credit facility maximum borrowing capacity	$ 1,800,000,000
Commercial paper	$ 0
Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, accordion feature		750,000,000
Debt guaranteed by domestic subsidiary		$ 100,000,000
Line of credit facility, commitment fee (percent)		0.25%
Revolving Credit Facility \| Minimum
Line of Credit Facility [Line Items]
Line of credit facility, interest rate, base rate (percent)		0.00%
Line of credit facility, interest rate, LIBOR plus all-in spread rate		1.00%
All-in interest rate spread based on credit rating (percent)		0.375%
Line of credit facility, commitment fee (percent)		0.125%
Line of credit facility, covenant terms		3.00x
Revolving Credit Facility \| Maximum
Line of Credit Facility [Line Items]
Line of credit facility, interest rate, base rate (percent)		0.70%
Line of credit facility, interest rate, LIBOR plus all-in spread rate		1.70%
All-in interest rate spread based on credit rating (percent)		1.375%
Line of credit facility, commitment fee (percent)		0.30%
Line of credit facility, covenant terms		4.25x
Current Credit Facility \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, current borrowing capacity		$ 1,800,000,000
Letter of credit, credit facility sub-facility, maximum borrowing amount		250,000,000
Previous Credit Facility \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, former borrowing capacity		$ 2,000,000,000.0

Debt - Short-term Debt (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Current maturities of long-term debt	$ 1,049	$ 961
Short-term debt and current portion of long-term debt	$ 1,049	$ 961

Segment and Geographic Area Reporting (Tables)

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Revenue and long-lived assets by geography

Geographic Area Data

Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is as follows:



	Revenues						Long-Lived Assets ⁽¹⁾
	Year Ended December 31,						As of December 31,
	2019		2018		2017		2019		2018
United States	$	5,429	$	5,610	$	5,790	$	769	$	670
Europe	2,326		2,625		2,697		305		277
Other areas	1,311		1,427		1,504		157		147
Total	$	9,066	$	9,662	$	9,991	$	1,231	$	1,094

_____________

(1)

Long-lived assets are comprised of (i) Land, buildings and equipment, net, (ii) Equipment on operating leases, net, (iii) Leased right-of-use (ROU) assets, net, (2019 only) and (iv) Internal use software, net.

Cover Page - USD ($)

12 Months Ended

Dec. 31, 2019

Jan. 31, 2020

Jun. 30, 2019

Entity Information [Line Items]

Entity Central Index Key

0001770450

Current Fiscal Year End Date

--12-31

Entity Shell Company

false

Document Fiscal Year Focus

2019

Document Fiscal Period Focus

Amendment Flag

false

Entity Address, Address Line One

P.O. Box 4505, 201 Merritt 7

Entity Address, City or Town

Norwalk

Entity Address, State or Province

Entity Address, Postal Zip Code

06851-1056

City Area Code

203

Local Phone Number

968-3000

Entity Well-known Seasoned Issuer

Yes

Entity Voluntary Filers

Entity Current Reporting Status

Yes

Entity Interactive Data Current

Yes

Document Type

10-K

Document Period End Date

Dec. 31, 2019

Entity Registrant Name

XEROX HOLDINGS CORPORATION

Entity Filer Category

Large Accelerated Filer

Entity Public Float

$ 7,818,052,585

Entity Common Stock, Shares Outstanding

212,789,134

Entity Small Business

false

Entity Emerging Growth Company

false

Title of 12(b) Security

Common Stock, $1 par value

Trading Symbol

XRX

Security Exchange Name

NYSE

Entity File Number

001-39013

Entity Incorporation, State or Country Code

Entity Tax Identification Number

83-3933743

Document Annual Report

true

Document Transition Report

false

Documents Incorporated by Reference



Document		Part of Form 10-K in which Incorporated
Xerox Holdings Corporation Notice of 2020 Annual Meeting of Shareholders and Proxy Statement (to be filed no later than 120 days after the close of the fiscal year covered by this report on Form 10-K)		III

Xerox Corporation

Entity Information [Line Items]

Entity Central Index Key

0000108772

Entity Shell Company

false

Entity Well-known Seasoned Issuer

Yes

Entity Voluntary Filers

Entity Current Reporting Status

Yes

Entity Interactive Data Current

Yes

Entity Registrant Name

XEROX CORPORATION

Entity Filer Category

Non-accelerated Filer

Entity Small Business

false

Entity Emerging Growth Company

false

Entity File Number

001-04471

Entity Incorporation, State or Country Code

Entity Tax Identification Number

16-0468020

Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

(shares in thousands)

We have a long-term incentive plan whereby eligible employees may be granted restricted stock units (RSUs), performance share units (PSUs) and stock options (SOs). We grant stock-based compensation awards in order to continue to attract and retain qualified employees and to better align employees' interests with those of our shareholders. Each of these awards is subject to settlement with newly issued shares of Xerox Holding's common stock. At December 31, 2019 and 2018, 13 million and 14 million shares, respectively, were available for grant of awards.

Stock-based compensation expense was as follows:



	Year Ended December 31,
	2019		2018		2017
Stock-based compensation expense, pre-tax	$	50	$	57	$	52
Income tax benefit recognized in earnings	13		14		20

In 2019, the timing of our annual grant of awards was changed from April to January to more closely align the grant date with the underlying performance period related to PSUs. Stock options were not awarded under the 2019 grant.

Restricted Stock Units

Compensation expense for RSUs is based upon the grant-date market price and is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of shares expected to vest. Beginning with the 2018 grant, RSU's vest on a graded schedule as follows: 25% after one year of service, 25% after two years of service and 50% after three years of service from the date of grant. Prior to the 2018 grant, RSUs vested on a three-year cliff basis from the date of grant.

Performance Share Units

In connection with the January 2019 PSU grant, the Board approved a change to the market-based component of the PSUs, replacing the Total Shareholder Return (TSR) metric with an Absolute Share Price (ASP) metric which focuses on stock price appreciation. The Board retained a Revenue and Free Cash Flow metric as performance-based measures as well as the three-year measurement period for all components. The components are weighted as follows: 25% Revenue, 25% Free Cash Flow and 50% Absolute Share Price. Accordingly, each PSU grant is one-half performance based (Revenue and Free Cash Flow) and one-half market-based (ASP). The measures are independent of each other and depending on the achievement of these metrics, a recipient of a PSU award is entitled to receive a number of shares equal to a percentage, ranging from 0% to 200% of the PSU award granted. The 2019 PSUs retained the three-year cliff vesting from the date of grant.

PSU awards granted in 2018 were comprised of a performance-based component that included Revenue Growth and Free Cash Flow metrics and a market-based component that included a TSR metric. The metrics were equally weighted; accordingly, each PSU grant was two-thirds performance-based (Revenue Growth and Free Cash Flow) and one-third market-based (TSR). The measures are independent of each other and depending on the achievement of these metrics, a recipient of a PSU award is entitled to receive a number of shares equal to a percentage, ranging from 0% to 200% of the PSU award granted. The 2018 PSUs have a three-year cliff vesting from the date of grant.

In December 2018, the Board approved and modified the performance-based metrics and the market-based metric of the 2018 PSU grant to a one-year performance period (2018), and a two-year time-based requirement (2019 and 2020).

PSU awards granted in 2017 were exclusively performance based and included metrics for Revenue Growth, Earnings per Share and Cash Flow from Operations that were measured over a three-year performance period. The 2017 PSUs have a three-year cliff vesting from the date of grant.

Performance-Based Component: PSUs vest contingent upon meeting pre-determined cumulative performance metrics. The fair value of our PSUs is based upon the grant-date market price. Compensation expense is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of shares expected to vest and based on meeting the performance metrics. If the cumulative three-year actual results exceed the stated targets, all plan participants have the potential to earn additional shares of common stock up to a maximum over-achievement of 100% of the original grant. If the stated targets are not met, any recognized compensation cost would be reversed.

Market-Based Component: The ASP metric included as the market-based component of the 2019 PSU grant is based on Xerox Holding's average closing price for the last 20 trading days of the three-year performance period, inclusive of dividends during that period. Payout for this portion of the PSU will be determined based on total return targets. Since the ASP metric of the PSU award represents a market condition, a Monte Carlo simulation was used to determine the grant-date fair value.

The TSR metric included as the market-based component of the 2018 PSU grant was based on the percentage change in Xerox Holdings stock price plus dividends paid over the three-year measurement period. Payout for this portion of the PSU was to be determined based on Xerox Holdings percentage change compared to the shareholder returns of the peer group of companies approved by the compensation committee of the Board (as disclosed in the 2018 annual proxy statement). Since the TSR metric of the PSU award represented a market condition, a Monte Carlo simulation was used to determine the grant-date fair value.

A summary of Xerox Holdings key valuation input assumptions used in the Monte Carlo simulation relative to the 2019 and 2018 PSU awards granted were as follows:



	2019 Award			2018 Award
Term	3 years			3 years
Risk-free interest rate⁽¹⁾	2.51		%	2.39		%
Dividend yield⁽²⁾	3.97		%	3.24		%
Volatility⁽³⁾	32.95		%	29.12		%
Weighted average fair value⁽⁴⁾	$	16.27		$	32.01

____________


(1)	The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the performance period.


(2)	The dividend yield was calculated as the expected quarterly dividend divided by our three-month average stock price as of the valuation date, annualized and continuously compounded.


(3)	Volatility is derived from historical stock prices as well as implied volatility when appropriate and available.


(4)	The weighted-average of fair values used to record compensation expense as determined by the Monte Carlo simulation.

Our 2019 Absolute Share Price metric is compared against total return targets to determine the payout as follows:



Total Return Targets⁽¹⁾	Payout Percentage
$40.00 and above	200	%
$35.00	100	%
$30.00	50	%
Below $30.00	0	%

Our 2018 TSR metric compared to the peer group TSR will determine the payout as follows:



Percentile	Payout as Percent of Target⁽¹⁾
80th and above	200	%
50th	100	%
25th	35	%
Below 25th	0	%

____________


(1)	For performance between the levels described above, the degree of vesting is interpolated on a linear basis.

Compensation expense for the market-based component of the PSU awards is recognized on a straight-line basis over the vesting period based on the fair value determined by the Monte Carlo simulation and, except in cases of employee forfeiture, cannot be reversed regardless of performance. There was no impact to compensation expense as a result of the Board’s approval to modify the 2018 TSR metric to a one-year performance period (2018) and a two-year time-based requirement (2019 and 2020).

Stock Options

The Board approved the granting of SOs as part of the 2018 plan design. Compensation expense associated with SOs is based upon the grant date fair value determined by utilizing the Black-Scholes (BS) option-pricing model and is recognized on a straight-line basis over the vesting period, based on management's estimate of the number of SOs expected to vest. The 2018 SOs have a contractual term of 10 years from the date of grant and vest as follows: 25% after one year of service, 25% after two years of service, and 50% after three years of service from the date of grant.

Xerox Holdings weighted average assumptions used in the BS option-pricing model relative to SO awards were as follows:



	2018 Award
Expected term⁽¹⁾	6.13 years
Expected volatility⁽²⁾	27.25	%
Expected dividend yield⁽³⁾	3.25	%
Risk-free interest rate⁽⁴⁾	2.63	%
Weighted average fair value⁽⁵⁾	$5.71

____________


(1)	Since these SO grants were effectively part of a new program, the expected term was calculated using the "Simplified Method” under the SEC guidance based on the SOs vesting schedule and contractual term. We did not have sufficient historical exercise data to provide a reasonable basis to estimate an expected term.


(2)	The expected volatility was calculated based on a combination of term-matched historical volatility and implied volatility from traded options.


(3)	The dividend yield was calculated as the expected quarterly dividend divided by our three-month average stock price as of the grant date.


(4)	The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve with a maturity matched to the expected term of the SOs.


(5)	The weighted average of fair values used to record compensation expense as determined by the BS option-pricing model.

Note: Management’s estimate of the number of shares expected to vest at the time of grant reflects an estimate for forfeitures based on our historical forfeiture rate to date. Should actual forfeitures differ from management’s estimate, the activity will be reflected in a subsequent period. In addition, RSUs, PSUs and SOs awarded to employees who are retirement-eligible at the date of grant, become retirement-eligible during the vesting period, or are terminated not-for-cause (e.g. as part of a restructuring initiative), vest based on service provided from the date of grant to the date of separation.

Summary of Stock-based Compensation Activity



	2019				2018				2017
	Shares		Weighted Average Grant Date Fair Value⁽¹⁾		Shares		Weighted Average Grant Date Fair Value⁽¹⁾		Shares		Weighted Average Grant Date Fair Value
Restricted Stock Units⁽²⁾
Outstanding at January 1	3,559		$	29.51	2,856		$	30.65	1,807		$	30.10
Granted	1,366		23.22		1,595		27.82		1,436		31.39
Vested	(1,666	)	29.28		(214	)	30.39		(117	)	36.99
Forfeited	(414	)	27.85		(678	)	30.04		(270	)	29.03
Outstanding at December 31	2,845		26.87		3,559		29.51		2,856		30.65
Performance Shares
Outstanding at January 1	2,462		$	29.83	3,117		$	31.54	5,054		$	33.98
Granted	1,433		19.46		1,060		27.36		1,349		32.80
Vested	(633	)	29.56		(853	)	32.59		(1,413	)	37.44
Forfeited/Expired	(432	)	27.50		(862	)	30.26		(1,873	)	34.59
Outstanding at December 31	2,830		24.99		2,462		29.83		3,117		31.54
Stock Options
Outstanding at January 1	1,022		$	27.84	—		$	—	—		$	—
Granted	—		—		1,414		27.88		—		—
Forfeited/Expired	(92	)	27.92		(392	)	27.98		—		—
Exercised	(69	)	27.98		—		—		—		—
Outstanding at December 31	861		27.83		1,022		27.84		—		—
Exercisable at December 31	233		27.83		39		27.98		—		—

____________


(1)	Exercise price for stock options.


(2)	Includes a 2018 Restricted Stock Award (RSA) grant of 351 shares with a corresponding grant date fair value of $28.51, which vested in 2019.

Unrecognized compensation cost related to non-vested stock-based awards at December 31, 2019 was as follows:



Awards	Unrecognized Compensation		Remaining Weighted-Average Vesting Period (Years)
Restricted Stock Units	$	30	1.6
Performance Shares	28		1.7
Stock Options	2		1.3
Total	$	60

The aggregate intrinsic value of outstanding stock-based awards was as follows:



Awards	December 31, 2019
Restricted Stock Units	$	105
Performance Shares	104
Stock Options	8

The intrinsic value and actual tax benefit realized for all vested and exercised stock-based awards was as follows:



	December 31, 2019						December 31, 2018						December 31, 2017
Awards	Total Intrinsic Value⁽¹⁾		Cash Received		Tax Benefit		Total Intrinsic Value		Cash Received		Tax Benefit		Total Intrinsic Value		Cash Received		Tax Benefit
Restricted Stock Units	$	55	$	—	$	11	$	6	$	—	$	2	$	3	$	—	$	1
Performance Share Units	23		—		6		21		—		4		40		—		12
Stock Options	1		2		—		—		—		—		—		—		—

____________

(1)

RSUs include a RSA grant of 351 shares, which vested in 2019.

Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

Goodwill

The following table presents the changes in the carrying amount of goodwill:



	Total
Balance at December 31, 2016⁽¹⁾	$	3,778
Foreign currency translation	105
Acquisitions:
MT Business	33
Other	11
Divestiture⁽²⁾	(6		)
Balance at December 31, 2017	$	3,921
Foreign currency translation	(63		)
Balance at December 31, 2018	$	3,858
Foreign currency translation	28
Acquisitions	14
Balance at December 31, 2019	$	3,900

_____________


(1)	Balance at December 31, 2016 has been reduced by $9 to reflect the allocation of goodwill to the sale of XIP, which is accounted for as a discontinued operation. Refer to Note 7 - Divestitures for additional information regarding this divestiture.


(2)	Relates to the sale of Xerox Research Centre Europe in Grenoble, France to Naver. Refer to Note 7 - Divestitures for additional information regarding this divestiture.

Intangible Assets, Net

Net intangible assets were $199 at December 31, 2019. Intangible assets were comprised of the following:



		December 31, 2019						December 31, 2018
	Weighted Average Amortization	Gross Carrying Amount		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount
Customer relationships	10 years	$	140	$	86	$	54	$	317	$	263	$	54
Distribution network	25 years	123		99		24		123		93		30
Trademarks	20 years	258		146		112		260		133		127
Technology and non-compete	12 years	18		9		9		15		6		9
Total Intangible Assets		$	539	$	340	$	199	$	715	$	495	$	220

The decrease in the gross carrying amount of customer relationships from December 31, 2018 is due to certain balances being fully amortized at December 31, 2019. Amortization expense related to intangible assets was $45, $48, and $53 for the three years ended December 31, 2019, 2018 and 2017, respectively. Excluding the impact of additional acquisitions, amortization expense is expected to approximate $36 in 2020 and in 2021, $32 in 2022, $30 in 2023 and $18 in 2024. The decrease from 2023 to 2024 is related to the customer relationships and technology, which will be fully amortized by 2024.

Other Comprehensive (Loss) Income - AOCL (Details) - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

AOCL [Abstract]

Cumulative translation adjustments

$ (1,961)

$ (2,023)

$ (1,781)

Other unrealized (losses) gains, net

(2)

(12)

Benefit plans net actuarial losses and prior service credits

(1,683)

(1,546)

(1,955)

Total Accumulated Other Comprehensive Loss Attributable to Xerox Holdings

(3,646)

(3,565)

$ (3,748)

Cumulative effect of change in accounting principles

^[1]

$ 120

AOCL

AOCL [Abstract]

Cumulative effect of change in accounting principles

^[1],[2],[3]

(127)

Accounting Standards Update 2018-02 | AOCL

AOCL [Abstract]

Cumulative effect of change in accounting principles

$ (127)

[1]	Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Income Taxes for additional information related to the adoption of ASU 2018-02.
[2]	AOCL - Accumulated other comprehensive loss.
[3]	Includes $117 related to the adoption of the Revenue Recognition Standard ASU 2014-09 - Revenue from Contracts with Customers (ASC Topic 606), see Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, and $3 related to our share of Fuji Xerox's adoption of ASU 2016-01 - Financial Instruments - Classification and Measurement.

Accumulated adjustment, net of tax, that results from the process of translating subsidiary financial statements and foreign equity investments into the reporting currency from the functional currency of the reporting entity, net of reclassification of realized foreign currency translation gains or losses.

Shareholders' Equity - Treasury Stock (Details) - Treasury Stock - USD ($) shares in Thousands	5 Months Ended	7 Months Ended	12 Months Ended
	Dec. 31, 2019	Jul. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019
Schedule of Common Stock and Treasury Stock [Line Items]
Authorized share repurchase program	$ 1,000,000,000	$ 2,000,000,000	$ 1,000,000,000
Stock repurchase program, remaining authorized repurchase amount	700,000,000		$ 700,000,000
Share repurchase cost	300,000,000	1,000,000,000
Share repurchase fees	$ 0	$ 1,000,000
Number of shares repurchased	9,097	35,339	18,343	26,093
July 2019 Share Repurchase Plan
Schedule of Common Stock and Treasury Stock [Line Items]
Authorized share repurchase program		$ 1,000,000,000.0
Previous Share Repurchase Program
Schedule of Common Stock and Treasury Stock [Line Items]
Stock repurchase program, remaining authorized repurchase amount					$ 1,000,000,000.0

Income and Other Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
U.S. federal statutory income tax rate	21.00%	21.00%	35.00%
Nondeductible expenses	1.30%	3.70%	1.30%
Effect of tax law changes	(4.60%)	14.50%	76.20%
Change in valuation allowance for deferred tax assets	2.00%	0.60%	1.10%
State taxes, net of federal benefit	3.50%	2.30%	3.60%
Audit and other tax return adjustments	0.60%	(1.80%)	(9.40%)
Tax-exempt income, credits and incentives	(2.10%)	(2.20%)	(3.20%)
Foreign rate differential adjusted for U.S. taxation of foreign profits	0.10%	4.80%	(16.50%)
Other	0.00%	2.10%	1.00%
Effective Income Tax Rate	21.80%	45.00%	89.10%
Income Taxes Paid	$ 94	$ 80	$ 84

Acquisitions - Schedule of Acquisitions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Goodwill	$ 3,900	$ 3,858	$ 3,921	$ 3,778
2019 Acquisitions
Business Acquisition [Line Items]
Accounts/finance receivables	3
Goodwill	14
Other assets	3
Total Assets acquired	41
Liabilities assumed	(3)
Total Purchase Price	$ 38
Customer relationships \| 2019 Acquisitions
Business Acquisition [Line Items]
Intangible assets, weighted average life (years)	10 years
Intangible assets	$ 19
Trademarks \| 2019 Acquisitions
Business Acquisition [Line Items]
Intangible assets, weighted average life (years)	5 years
Intangible assets	$ 2

Debt - Long-term Debt (Details) - USD ($) $ in Millions	Mar. 15, 2019	Dec. 31, 2019	Mar. 14, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Principal debt balance		$ 4,313		$ 5,281
Unamortized discount		(16)		(25)
Debt issuance costs		(17)		(25)
Terminated swaps		1		2
Current swaps		1		(3)
Less: current maturities		(1,049)		(961)
Total Long-term Debt		3,233		4,269
2020		1,051
2021		1,062
2022		300
2023		1,000
2024		300
Thereafter		600
Long-term debt maturities, subsequent year by quarter, first		0
Long-term debt maturities, subsequent year by quarter, second		313
Long-term debt maturities, subsequent year by quarter, third		738
Long-term debt maturities, subsequent year by quarter, fourth		0
Senior Notes due 2019 2.75%
Debt Instrument [Line Items]
Principal debt balance		0		406
Senior Notes due 2019 5.63%
Debt Instrument [Line Items]
Principal debt balance		$ 0		554
Senior Notes due 2020 2.80%
Debt Instrument [Line Items]
Stated Rate (percent)		2.80%
Debt, weighted average interest rate (percentage)		2.50%
Principal debt balance		$ 313		313
Senior Notes due 2020 3.50%
Debt Instrument [Line Items]
Stated Rate (percent)		3.50%
Debt, weighted average interest rate (percentage)		3.47%
Principal debt balance		$ 362		362
Senior Notes due 2020 2.75%
Debt Instrument [Line Items]
Stated Rate (percent)		2.75%
Debt, weighted average interest rate (percentage)		2.67%
Principal debt balance		$ 376		375
Senior Notes due 2021 4.50%
Debt Instrument [Line Items]
Stated Rate (percent)		4.50%
Debt, weighted average interest rate (percentage)		4.54%
Principal debt balance		$ 1,062		1,062
Senior Notes due 2022 4.07%
Debt Instrument [Line Items]
Stated Rate (percent)		4.07%
Debt, weighted average interest rate (percentage)		4.07%
Principal debt balance		$ 300		300
Senior Notes due 2023 4.13%
Debt Instrument [Line Items]
Stated Rate (percent)	4.125%	4.13%	3.625%
Debt, weighted average interest rate (percentage)		3.68%
Principal debt balance		$ 1,000		1,000
Increase to coupon rate	0.50%
Senior Notes due 2024 3.80%
Debt Instrument [Line Items]
Stated Rate (percent)		3.80%
Debt, weighted average interest rate (percentage)		3.84%
Principal debt balance		$ 300		300
Senior Notes due 2035 4.80%
Debt Instrument [Line Items]
Stated Rate (percent)		4.80%
Debt, weighted average interest rate (percentage)		4.84%
Principal debt balance		$ 250		250
Senior Notes due 2039 6.75%
Debt Instrument [Line Items]
Stated Rate (percent)		6.75%
Debt, weighted average interest rate (percentage)		6.78%
Principal debt balance		$ 350		350
Long-term Debt
Debt Instrument [Line Items]
Principal debt balance		$ 4,313		5,272
Capital Lease Obligations
Debt Instrument [Line Items]
Principal debt balance				$ 9

Earnings per Share - Dividends per Common Share (Details) - $ / shares	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Earnings Per Share [Abstract]
Dividends per common share (in dollars per share)	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.28	$ 1.00	$ 1	$ 1

Employee Benefit Plans - Investment Strategy (Details) - Pension Plan	Dec. 31, 2019	Dec. 31, 2018
U.S.
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	100.00%	100.00%
Foreign Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	100.00%	100.00%
Equity investments \| U.S.
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	23.00%	12.00%
Equity investments \| Foreign Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	14.00%	13.00%
Fixed income investments \| U.S.
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	61.00%	73.00%
Fixed income investments \| Foreign Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	46.00%	46.00%
Real estate \| U.S.
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	6.00%	3.00%
Real estate \| Foreign Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	5.00%	6.00%
Private equity/venture capital \| U.S.
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	8.00%	6.00%
Private equity/venture capital \| Foreign Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	24.00%	24.00%
Other \| U.S.
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	2.00%	6.00%
Other \| Foreign Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan, plan assets, allocation (percent)	11.00%	11.00%

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

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Less: Income from continuing operations attributable to noncontrolling interests

$ 1,361

$ 374

$ 207

Less: Income from discontinued operations attributable to noncontrolling interests

Translation adjustments, net

1,353

361

195

^[1]

(242)

483

Unrealized (losses) gains, net

^[1]

(6)

Changes in defined benefit plans, net

^[1]

(10)

409

106

Other Comprehensive Income, Net

^[1]

183

590

Less: Other comprehensive income, net attributable to noncontrolling interests

^[1]

Other Comprehensive Income, Net Attributable to Xerox Holdings

^[1]

183

589

Comprehensive Income, Net

1,407

557

797

Less: Comprehensive income, net from continuing operations attributable to noncontrolling interests

Less: Comprehensive income, net from discontinued operations attributable to noncontrolling interests

Comprehensive Income, Net Attributable to Xerox Holdings

1,399

544

784

Xerox Corporation

Less: Income from continuing operations attributable to noncontrolling interests

1,361

374

207

Less: Income from discontinued operations attributable to noncontrolling interests

Translation adjustments, net

1,353

361

195

^[2]

(242)

483

Unrealized (losses) gains, net

^[2]

(6)

Changes in defined benefit plans, net

^[2]

(10)

409

106

Other Comprehensive Income, Net

^[2]

183

590

Less: Other comprehensive income, net attributable to noncontrolling interests

^[2]

Other Comprehensive Income, Net Attributable to Xerox Holdings

^[2]

183

589

Comprehensive Income, Net

1,407

557

797

Less: Comprehensive income, net from continuing operations attributable to noncontrolling interests

Less: Comprehensive income, net from discontinued operations attributable to noncontrolling interests

Comprehensive Income, Net Attributable to Xerox Holdings

$ 1,399

$ 544

$ 784

[1]	Refer to Note 25 - Other Comprehensive (Loss) Income for gross components of Other Comprehensive Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.
[2]	Refer to Note 25 - Other Comprehensive (Loss) Income for gross components of Other Comprehensive Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.

Income and Other Taxes - Income Tax Expense (Benefit), Current Deferred, by Jurisdiction (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Current Federal Tax Expense (Benefit)	$ (3)	$ 37	$ (12)
Deferred Federal Income Tax Expense (Benefit)	98	83	411
Current Foreign Tax Expense	43	46	62
Deferred Foreign Income Tax Expense (Benefit)	5	57	(21)
Current State Tax Expense	15	29	19
Deferred State Income Tax (Benefit) Expense	21	(5)	9
Income Tax Expense	$ 179	$ 247	$ 468

Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Stockholders' Equity [Abstract]
Dividends per common share (in dollars per share)	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.28	$ 1.00	$ 1	$ 1
Dividends per preferred share (in dollars per share)	$ 20	$ 20	$ 20	$ 20	$ 20	$ 20	$ 20	$ 20	$ 20	$ 20	$ 20	$ 20	$ 80	$ 80	$ 80

Adoption of New Leasing Standard - Lessee (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of components of lease expense

The components of lease expense are as follows:



	Year Ended December 31, 2019
Operating lease expense	$	125
Short-term lease expense	21
Variable lease expense⁽¹⁾	48
Sublease income	(1		)
Total Lease expense	$	193

_____________

(1)

Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as well as taxes and insurance.

Schedule of operating leases assets and liabilities

Operating leases ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows:



	December 31, 2019
Other long-term assets	$	319

Accrued expenses and other current liabilities	$	87
Other long-term liabilities	260
Total Operating lease liabilities	$	347

Schedule of supplemental information related to operating leases

Supplemental information related to operating leases is as follows:



	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows	$	126
Right-of-use assets obtained in exchange for new lease liabilities ⁽¹⁾	75
Weighted-average remaining lease term	4 years
Weighted-average discount rate	5.47		%

_____________

(1)

Includes the impact of new leases as well as remeasurements and modifications to existing leases.

Schedule of maturities and additional information related to operating lease liabilities

Maturities and additional information related to operating lease liabilities are as follows:



	December 31, 2019
2020	$	109
2021	87
2022	73
2023	56
2024	24
Thereafter	45
Total Lease payments	394
Less: Imputed interest	47
Total Operating lease liabilities	$	347

Schedule of future minimum rental payments for operating leases

Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows:



	December 31, 2018
2019	$	114
2020	88
2021	64
2022	50
2023	36
Thereafter	27
Total Operating lease commitments	$	379

Estimated minimum future revenues associated with Equipment on operating leases are as follows:



	December 31,
	2019		2018
12 months	$	226	$	260
24 months	139		178
36 months	84		111
48 months	39		61
60 months	12		21
Thereafter	2		2
Total	$	502	$	633

y. Refer to Note 2 - Adoption of New Leasing Standard - Lessee for additional information regarding leased assets.

Fair Value of Financial Assets and Liabilities

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities



	As of December 31,
	2019		2018
Assets
Foreign exchange contracts - forwards	$	2	$	14
Foreign currency options	—		1
Interest rate swaps	1		—
Deferred compensation investments in mutual funds	19		16
Total	$	22	$	31
Liabilities
Foreign exchange contracts - forwards	$	8	$	1
Interest rate swaps	—		3
Deferred compensation plan liabilities	18		16
Total	$	26	$	20

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

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

Summary of Other Financial Assets and Liabilities

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



	December 31, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	2,740	$	2,740	$	1,081	$	1,081
Accounts receivable, net	1,236		1,236		1,270		1,270
Short-term debt and current portion of long-term debt	1,049		1,054		961		966
Long-term debt	3,233		3,331		4,269		3,922

The fair value amounts for Cash and cash equivalents and Accounts receivable, net, approximate carrying amounts due to the short maturities of these instruments. The fair value of Short-term debt, including the current portion of long-term debt, and Long-term debt was estimated based on the current rates offered to us for debt of similar maturities (Level 2). The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at such date.

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.

Inventories and Equipment on Operating Leases, Net [Abstract]

Earnings per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Earnings per Share

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



	Year Ended December 31,
	2019			2018			2017
Basic Earnings per Share:
Net Income from continuing operations attributable to Xerox Holdings	$	648		$	306		$	66
Accrued dividends on preferred stock	(14		)	(14		)	(14		)
Adjusted Net income from continuing operations available to common shareholders	634			292			52
Income from discontinued operations attributable to Xerox Holdings, net of tax	705			55			129
Adjusted Net income available to common shareholders	$	1,339		$	347		$	181
Weighted-average common shares outstanding	221,969			248,707			254,341
Basic Earnings per Share:
Continuing operations	$	2.86		$	1.17		$	0.20
Discontinued operations	3.17			0.23			0.51
Basic Earnings per Share	$	6.03		$	1.40		$	0.71

Diluted Earnings per Share:
Net Income from continuing operations attributable to Xerox Holdings	$	648		$	306		$	66
Accrued dividends on preferred stock	—			(14		)	(14		)
Adjusted Net income from continuing operations available to common shareholders	648			292			52
Income from discontinued operations attributable to Xerox Holdings, net of tax	705			55			129
Adjusted Net income available to common shareholders	$	1,353		$	347		$	181
Weighted-average common shares outstanding	221,969			248,707			254,341
Common shares issuable with respect to:
Stock options	55			—			—
Restricted stock and performance shares	4,403			2,953			2,229
Convertible preferred stock	6,742			—			—
Adjusted Weighted average common shares outstanding	233,169			251,660			256,570

Diluted Earnings per Share:
Continuing operations	$	2.78		$	1.16		$	0.20
Discontinued operations	3.02			0.22			0.51
Diluted Earnings per Share	$	5.80		$	1.38		$	0.71

The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands):
Stock options	805			1,022			—
Restricted stock and performance shares	1,272			3,068			3,706
Convertible preferred stock	—			6,742			6,742
Total Anti-Dilutive Securities	2,077			10,832			10,448

Dividends per Common Share	$	1.00		$	1.00		$	1.00

Inventories and Equipment on Operating Leases, Net

12 Months Ended

Dec. 31, 2019

Inventories and Equipment on Operating Leases, Net

The following is a summary of Inventories by major category:



	December 31,
	2019		2018
Finished goods	$	576	$	710
Work-in-process	47		49
Raw materials	71		70
Total Inventories	$	694	$	829

The transfer of equipment from our inventories to equipment subject to an operating lease is presented in our Consolidated Statements of Cash Flows in the operating activities section. Equipment on operating leases and similar arrangements consists of our equipment rented to customers and depreciated to estimated salvage value at the end of the lease term. Amounts disclosed below at December 31, 2018 were accounted for under ASC 840, Leases, which was superseded by ASC 842, Leases, adopted on January 1, 2019. Differences upon adoption were not material. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, Recent Accounting Pronouncements for additional information.

Equipment on operating leases and the related accumulated depreciation were as follows:



	December 31,
	2019			2018
Equipment on operating leases	$	1,443		$	1,519
Accumulated depreciation	(1,079		)	(1,077		)
Equipment on operating leases, net	$	364		$	442

Depreciable lives generally vary from three to five years consistent with our planned and historical usage of the equipment subject to operating leases. Estimated minimum future revenues associated with Equipment on operating leases are as follows:



	December 31,
	2019		2018
12 months	$	226	$	260
24 months	139		178
36 months	84		111
48 months	39		61
60 months	12		21
Thereafter	2		2
Total	$	502	$	633

Total contingent rentals on operating leases, consisting principally of usage charges in excess of minimum contracted amounts, for the years ended December 31, 2019, 2018 and 2017 amounted to $107, $120 and $119, respectively.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2019

Defined Benefit Plan [Abstract]

Employee Benefit Plans

We sponsor numerous defined benefit and defined contribution pension and other post-retirement benefit plans, primarily retiree health care, in our domestic and international operations. December 31 is the measurement date for all of our post-retirement benefit plans.

Over the past several years, where legally possible, we have amended our major defined benefit pension plans to freeze current benefits and eliminate benefits accruals for future service, including our primary U.S. defined benefit plan for salaried employees, the Canadian Salary Pension Plan and the U.K. Final Salary Pension Plan. The freeze of current benefits is the primary driver of the reduction in pension service costs since 2012. In certain Non-U.S. plans, we are required to continue to consider salary increases and inflation in determining the benefit obligation related to prior service. The Netherlands defined benefit pension plan has also been amended to reflect the Company's ability to reduce the indexation of future pension benefits within the plan in scenarios when the returns on plan assets are insufficient to cover that indexation.

Prior to the freeze of current benefits, most of our defined benefit pension plans generally provided employees a benefit, depending on eligibility, calculated under a highest average pay and years of service formula. Our primary domestic defined benefit pension plans provided a benefit at the greater of (i) the highest average pay and years of service formula, (ii) the benefit calculated under a formula that provides for the accumulation of salary and interest credits during an employee's work life or (iii) the individual account balance from the Company's prior defined contribution plan (Transitional Retirement Account or TRA). Pension plan assets consist of both defined benefit plan assets and assets legally restricted to the TRA accounts.

The combined investment results for our primary domestic plans, along with the results for our other defined benefit plans, are shown below in the “actual return on plan assets” caption. To the extent that investment results relate to TRA assets, such results are charged directly to these accounts as a component of interest cost.



	Pension Benefits
	U.S. Plans						Non-U.S. Plans						Retiree Health
	2019			2018			2019			2018			2019			2018
Change in Benefit Obligation:
Benefit obligation, January 1	$	3,234		$	4,180		$	6,007		$	6,703		$	385		$	723
Service cost	2			2			22			27			2			4
Interest cost	218			63			153			149			15			23
Plan participants' contributions	—			—			3			4			10			3
Actuarial loss (gain)	564			(288		)	472			(293		)	8			(63		)
Currency exchange rate changes	—			—			114			(339		)	5			(11		)
Plan Amendments/Curtailments	—			—			(2		)	41			—			(234		)
Benefits paid/settlements	(420		)	(723		)	(270		)	(281		)	(40		)	(60		)
Other	—			—			(7		)	(4		)	—			—
Benefit Obligation, December 31	$	3,598		$	3,234		$	6,492		$	6,007		$	385		$	385

Change in Plan Assets:
Fair value of plan assets, January 1	$	2,358		$	3,224		$	5,729		$	6,308		$	—		$	—
Actual return on plan assets	529			(170		)	680			(85		)	—			—
Employer contributions	26			27			115			117			30			57
Plan participants' contributions	—			—			3			4			10			3
Currency exchange rate changes	—			—			135			(329		)	—			—
Benefits paid/settlements	(420		)	(723		)	(270		)	(281		)	(40		)	(60		)
Other	—			—			(7		)	(5		)	—			—
Fair Value of Plan Assets, December 31	$	2,493		$	2,358		$	6,385		$	5,729		$	—		$	—

Net Funded Status at December 31⁽¹⁾	$	(1,105	)	$	(876	)	$	(107	)	$	(278	)	$	(385	)	$	(385	)

Amounts Recognized in the Consolidated Balance Sheets:
Other long-term assets	$	—		$	—		$	451		$	281		$	—		$	—
Accrued compensation and benefit costs	(25		)	(25		)	(22		)	(24		)	(33		)	(35		)
Pension and other benefit liabilities	(1,080		)	(851		)	(536		)	(535		)	—			—
Post-retirement medical benefits	—			—			—			—			(352		)	(350		)
Net Amounts Recognized	$	(1,105	)	$	(876	)	$	(107	)	$	(278	)	$	(385	)	$	(385	)

Accumulated Benefit Obligation	$	3,598		$	3,234		$	6,326		$	5,847

_____________


(1)	Includes under-funded and unfunded plans.

Benefit plans pre-tax amounts recognized in AOCL at December 31:



	Pension Benefits
	U.S. Plans						Non-U.S. Plans				Retiree Health
	2019			2018			2019		2018		2019			2018
Net actuarial loss (gain)	$	1,059		$	933		$	1,462	$	1,457	$	(29	)	$	(42	)
Prior service (credit) cost	(3		)	(5		)	22		19		(164		)	(240		)
Total Pre-tax loss (gain)	$	1,056		$	928		$	1,484	$	1,476	$	(193	)	$	(282	)



	December 31, 2019				December 31, 2018
	Accumulated Benefit Obligation		Fair Value of Plan Assets		Accumulated Benefit Obligation		Fair Value of Plan Assets
Underfunded Plans:
U.S.	$	3,261	$	2,493	$	2,918	$	2,358
Non U.S.	767		697		713		624

Unfunded Plans:
U.S.	$	337	$	—	$	316	$	—
Non U.S.	469		—		446		—

Total Underfunded and Unfunded Plans:
U.S.	$	3,598	$	2,493	$	3,234	$	2,358
Non U.S.	1,236		697		1,159		624
Total	$	4,834	$	3,190	$	4,393	$	2,982

Aggregate information for pension plans with a benefit obligation in excess of plan assets is presented below:



	December 31, 2019				December 31, 2018
	Benefit Obligation		Fair Value of Plan Assets		Benefit Obligation		Fair Value of Plan Assets
Underfunded Plans:
U.S.	$	3,261	$	2,493	$	2,918	$	2,358
Non U.S.	780		697		888		782

Unfunded Plans:
U.S.	$	337	$	—	$	316	$	—
Non U.S.	479		—		456		—

Total Underfunded and Unfunded Plans:
U.S.	$	3,598	$	2,493	$	3,234	$	2,358
Non U.S.	1,259		697		1,344		782
Total	$	4,857	$	3,190	$	4,578	$	3,140

Our pension plan assets and benefit obligations at December 31, 2019 were as follows:



	Fair Value of Pension Plan Assets		Pension Benefit Obligations		Net Funded Status
U.S. funded	$	2,493	$	3,261	$	(768	)
U.S. unfunded	—		337		(337		)
Total U.S.	2,493		3,598		(1,105		)
U.K.	4,169		3,798		371
Netherlands	1,083		1,101		(18		)
Canada	721		738		(17		)
Germany	—		367		(367		)
Other	412		488		(76		)
Total	$	8,878	$	10,090	$	(1,212	)

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



	Year Ended December 31,
	Pension Benefits
	U.S. Plans									Non-U.S. Plans									Retiree Health
	2019			2018			2017			2019			2018			2017			2019			2018			2017
Components of Net Periodic Benefit Costs:
Service cost	$	2		$	2		$	2		$	22		$	27		$	29		$	2		$	4		$	5
Interest cost⁽¹⁾	218			63			226			153			149			158			15			23			28
Expected return on plan assets⁽²⁾	(210		)	(67		)	(227		)	(233		)	(244		)	(221		)	—			—			—
Recognized net actuarial loss (gain)	24			22			21			43			56			79			(5		)	—			1
Amortization of prior service credit	(2		)	(2		)	(2		)	(2		)	(4		)	(4		)	(77		)	(19		)	(4		)
Recognized settlement loss	93			173			133			1			1			2			—			—			—
Recognized curtailment gain	—			—			—			—			(1		)	(2		)	—			—			—
Defined Benefit Plans	125			191			153			(16		)	(16		)	41			(65		)	8			30
Defined contribution plans	26			37			38			23			29			29			n/a			n/a			n/a
Net Periodic Benefit Cost (Credit)	151			228			191			7			13			70			(65		)	8			30
Other changes in plan assets and benefit obligations recognized in Other Comprehensive (Loss) Income:
Net actuarial loss (gain) ⁽³⁾	243			(50		)	238			24			33			(273		)	8			(63		)	(16		)
Prior service cost (credit)	—			—			—			—			41			(1		)	—			(234		)	—
Amortization of net actuarial (loss) gain	(117		)	(195		)	(154		)	(44		)	(57		)	(81		)	5			—			(1		)
Amortization of net prior service credit	2			2			2			2			4			4			77			19			4
Curtailment gain	—			—			—			—			1			—			—			—			—
Total Recognized in Other Comprehensive (Loss) Income⁽⁴⁾	128			(243		)	86			(18		)	22			(351		)	90			(278		)	(13		)
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income	$	279		$	(15	)	$	277		$	(11	)	$	35		$	(281	)	$	25		$	(270	)	$	17

_____________


(1)	Interest cost for Pension Benefits includes interest expense on non-TRA obligations of $243, $258 and $257 and interest expense (income) directly allocated to TRA participant accounts of $128, $(46) and $127 for the years ended December 31, 2019, 2018 and 2017, respectively.


(2)	Expected return on plan assets includes expected investment income on non-TRA assets of $315, $357 and $321 and actual investment (loss) income on TRA assets of $128, $(46) and $127 for the years ended December 31, 2019, 2018 and 2017, respectively.


(3)	The non-U.S. plans Net actuarial (gain) loss for 2018 reflects an out-of-period adjustment in third quarter 2018 of $(53) to correct an overstated benefit obligation for our U.K. Final Salary Pension Plan at December 31, 2017. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information regarding this adjustment.


(4)	Amounts represent the pre-tax effect included in Other comprehensive (loss) income. Refer to Note 25 - Other Comprehensive (Loss) Income for the related tax effects and the net of tax amounts.

Plan Amendments

Pension:

On October 26, 2018, the High Court of Justice in the United Kingdom (the High Court) ruled that Lloyds Bank PLC was required to equalize benefits payable to men and women under its U.K. defined benefit pension plans by amending those plans to increase the pension benefits payable to participants that accrued such benefits during the period from 1990 to 1997. The inequalities arose from statutory differences in the retirement ages and rates of accrual of benefits for men and women related to Guaranteed Minimum Pension (GMP) benefits that are included in U.K. defined benefit pension plans.

Based on the above ruling, we currently estimate the cost of equalization under the minimum cost approach permitted by the High Court’s ruling to be approximately 1.2% of our U.K. defined benefit plan obligation at December 31, 2018 or approximately GBP 33 million (approximately USD $42). This increase in the benefit obligation was recorded as a plan amendment in 2018 and will be amortized as prior service cost over 24 years (approximately USD $2 per year) through 2019 and future years’ Net periodic benefit costs. The amount recorded continues to reflect our best estimate of the impact from this ruling. However, several significant uncertainties remain and therefore our estimate is subject to future change and adjustment. In particular, the cost is very sensitive to i) the method of GMP equalization; ii) actuarial assumptions and market conditions; iii) the benefit structure of our plan and operational practices; and iv) the demographic profile of our plan. In addition, we are continuing to evaluate the acceptable methodologies that the High Court has determined, and we still need to agree upon the appropriate methodology with our plan trustees.

Retiree Health Plans:

In December 2018, we amended our Canadian Retiree Health Plan to eliminate coverage for certain future and existing retirees. This negative plan amendment resulted in a reduction in the postretirement benefit obligation of $19, which is expected to be amortized to future net periodic benefit costs as a prior service credit.

In October 2018, we amended our U.S. Retiree Health Plan effective January 1, 2019, to reduce certain benefits for existing non-union retirees through the reduction or elimination of coverage or cost-sharing subsidies for retiree health care and life insurance costs. This negative plan amendment resulted in a reduction in the postretirement benefit obligation of $283, which consisted of $216 for the plan amendment and an actuarial gain of $67 related to the required plan remeasurement upon amendment. The amount for the plan amendment is expected to be amortized to future net periodic benefit costs as a prior service credit.

Plan Assets

Current Allocation

As of the 2019 and 2018 measurement dates, the global pension plan assets were $8,878 and $8,087, respectively. These assets were invested among several asset classes.

The following tables present the defined benefit plans assets measured at fair value and the basis for that measurement.



	December 31, 2019
	U.S. Plans											Non-U.S. Plans
Asset Class	Level 1			Level 2		Level 3		Assets measured at NAV⁽¹⁾		Total		Level 1		Level 2		Level 3		Assets measured at NAV⁽¹⁾		Total
Cash and cash equivalents	$	9		$	—	$	—	$	—	$	9	$	421	$	—	$	—	$	—	$	421
Equity Securities:
U.S.	182			—		—		39		221		132		52		—		—		184
International	193			—		—		191		384		462		302		—		118		882
Fixed Income Securities:
U.S. treasury securities	—			316		—		—		316		—		47		—		—		47
Debt security issued by government agency	—			67		—		—		67		—		1,825		—		—		1,825
Corporate bonds	—			1,119		—		—		1,119		—		841		—		—		841
Derivatives	—			45		—		—		45		—		186		—		—		186
Real estate	—			—		5		10		15		—		—		219		116		335
Private equity/venture capital	—			—		—		199		199		—		—		5		1,527		1,532
Guaranteed insurance contracts	—			—		—		—		—		—		—		90		—		90
Other⁽²⁾⁽³⁾	(36		)	—		—		154		118		11		31		—		—		42
Total Fair Value of Plan Assets	$	348		$	1,547	$	5	$	593	$	2,493	$	1,026	$	3,284	$	314	$	1,761	$	6,385

_____________


(1)	Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.


(2)	Other NAV includes mutual funds of $76 (measured at NAV) which are invested approximately 75% in fixed income securities and approximately 25% in equity securities.


(3)	Other Level 1 includes net non-financial (liabilities) assets of $(36) U.S. and $11 Non-U.S., respectively, such as due to/from broker, interest receivables and accrued expenses.



	December 31, 2018
	U.S. Plans												Non-U.S. Plans
Asset Class	Level 1		Level 2			Level 3		Assets measured at NAV⁽¹⁾		Total			Level 1		Level 2		Level 3		Assets measured at NAV⁽¹⁾		Total
Cash and cash equivalents	$	1	$	—		$	—	$	—	$	1		$	370	$	—	$	—	$	—	$	370
Equity Securities:
U.S.	82		—			—		35		117			103		42		—		—		145
International	97		—			—		52		149			359		111		—		112		582
Fixed Income Securities:
U.S. treasury securities	—		248			—		—		248			—		57		—		—		57
Debt security issued by government agency	—		81			—		—		81			—		1,861		—		—		1,861
Corporate bonds	—		1,363			—		—		1,363			—		736		—		—		736
Derivatives	—		(26		)	—		—		(26		)	—		99		—		—		99
Real estate	19		—			—		9		28			—		—		210		157		367
Private equity/venture capital	—		—			—		353		353			—		—		6		1,386		1,392
Guaranteed insurance contracts	—		—			—		—		—			—		—		92		—		92
Other⁽²⁾	12		—			—		32		44			5		23		—		—		28
Total Fair Value of Plan Assets	$	211	$	1,666		$	—	$	481	$	2,358		$	837	$	2,929	$	308	$	1,655	$	5,729

_____________


(1)	Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.


(2)	Other Level 1 includes net non-financial (liabilities) assets of $12 U.S. and $5 Non-U.S., respectively, such as due to/from broker, interest receivables and accrued expenses.

The following tables represents a roll-forward of the defined benefit plans assets measured at fair value using significant unobservable inputs (Level 3 assets):



	U.S.			Non-U.S.
	Real Estate			Real Estate			Private Equity/Venture Capital			Guaranteed Insurance Contracts			Total
Balance at December 31, 2017	$	—		$	137		$	7		$	100		$	244
Purchases	—			22			—			1			23
Sales	—			(1		)	—			(6		)	(7		)
Realized losses	(4		)	—			—			—			—
Unrealized gains (losses)	4			62			(4		)	—			58
Currency translation	—			(10		)	3			(3		)	(10		)
Balance at December 31, 2018	$	—		$	210		$	6		$	92		$	308
Purchases	5			—			—			2			2
Sales	—			—			(5		)	(4		)	(9		)
Unrealized gains	—			9			4			2			15
Currency translation	—			—			—			(2		)	(2		)
Balance at December 31, 2019	$	5		$	219		$	5		$	90		$	314

Level 3 Valuation Method

Our primary Level 3 assets are Real Estate and Private Equity/Venture Capital investments. The fair value of our real estate investment funds are based on the Net Asset Value (NAV) of our ownership interest in the funds. NAV information is received from the investment advisers and is primarily derived from third-party real estate appraisals for the properties owned. The fair value for our private equity/venture capital partnership investments are based on our share of the estimated fair values of the underlying investments held by these partnerships as reported (or expected to be reported) in their audited financial statements. The valuation techniques and inputs for our Level 3 assets have been consistently applied for all periods presented.

Investment Strategy

The target asset allocations for our worldwide defined benefit pension plans were:



	2019		2018
	U.S.	Non-U.S.	U.S.	Non-U.S.
Equity investments	23%	14%	12%	13%
Fixed income investments	61%	46%	73%	46%
Real estate	6%	5%	3%	6%
Private equity/venture capital	8%	24%	6%	24%
Other	2%	11%	6%	11%
Total Investment Strategy	100%	100%	100%	100%

We employ a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. The intent of this strategy is to minimize plan expenses by exceeding the interest growth in long-term plan liabilities. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. This consideration involves the use of long-term measures that address both return and risk. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value and small and large capitalizations. Other assets such as real estate, private equity, and hedge funds are used to improve portfolio diversification. Derivatives may be used to hedge market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risks and returns are measured and monitored on an ongoing basis through annual liability measurements and quarterly investment portfolio reviews.

Expected Long-term Rate of Return

We employ a “building block” approach in determining the long-term rate of return for plan assets. Historical markets are studied and long-term relationships between equities and fixed income are assessed. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio return is established giving consideration to investment diversification and rebalancing. Peer data and historical returns are reviewed periodically to assess reasonableness and appropriateness.

Contributions

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



	Year Ended December 31,
	2019		Estimated 2020
U.S. Plans	$	26	$	25
Non-U.S. Plans	115		110
Total	$	141	$	135

Retiree Health	$	30	$	35

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following years:



	Pension Benefits
	U.S.		Non-U.S.		Total		Retiree Health
2020	$	480	$	266	$	746	$	35
2021	262		272		534		32
2022	269		277		546		31
2023	272		283		555		29
2024	264		289		553		28
Years 2025-2029	1,198		1,526		2,724		118

Assumptions

Weighted-average assumptions used to determine benefit obligations at the plan measurement dates:



	Pension Benefits
	2019				2018				2017
	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Discount rate	3.1	%	1.8	%	4.2	%	2.6	%	3.6	%	2.3	%
Rate of compensation increase	0.2	%	2.6	%	0.2	%	2.6	%	0.2	%	2.6	%
Interest crediting rate	2.8	%	1.5	%	2.8	%	1.5	%	2.8	%	1.5	%



	Retiree Health
	2019		2018		2017
Discount rate	3.0	%	4.1	%	3.5	%

Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:



	Pension Benefits
	2020				2019				2018				2017
	U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.		U.S.		Non-U.S.
Discount rate	3.1	%	1.8	%	4.2	%	2.6	%	3.6	%	2.3	%	4.0	%	2.5	%
Expected return on plan assets	6.0	%	3.3	%	6.0	%	4.0	%	5.8	%	3.8	%	7.0	%	4.1	%
Rate of compensation increase	0.2	%	2.6	%	0.2	%	2.6	%	0.2	%	2.6	%	0.2	%	2.6	%
Interest crediting rate	2.8	%	1.5	%	2.8	%	1.5	%	2.8	%	1.5	%	2.8	%	1.5	%



	Retiree Health
	2020		2019		2018		2017
Discount rate	3.0	%	4.1	%	3.5	%	3.9	%

_____________

Assumed health care cost trend rates were as follows:



	December 31,
	2019		2018
Health care cost trend rate assumed for next year	6.0	%	6.3	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.3	%	4.7	%
Year that the rate reaches the ultimate trend rate	2026		2025

Defined Contribution Plans

We have post-retirement savings and investment plans in several countries, including the U.S., the U.K. and Canada. In many instances, employees who participated in the defined benefit pension plans that have been amended to freeze future service accruals were transitioned to an enhanced defined contribution plan. In these plans employees are allowed to contribute a portion of their salaries and bonuses to the plans, and we match a portion of the employee contributions. We recorded charges related to our defined contribution plans of $49 in 2019, $66 in 2018 and $67 in 2017.

Other Comprehensive (Loss) Income (Details) - USD ($)
$ in Millions

1 Months Ended

12 Months Ended

Nov. 30, 2019

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

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

Aggregate adjustment in period, pre-tax

$ 53

$ (251)

$ 484

Aggregate adjustment in period, net of tax

(242)

483

Divestiture - reclassification, pre-tax

Divestiture - reclassification, net of tax

Translation Adjustment Gains (Losses), Pre-tax

(251)

484

Translation Adjustment Gains (Losses), Net of Tax

^[1]

(242)

483

Changes in fair value of cash flow hedges gains (losses), pre-tax

(28)

Changes in fair value of cash flow hedges gains (losses), net of tax

(23)

Changes in cash flow hedges reclassed to earnings, pre-tax

(9)

Changes in cash flow hedges reclassed to earnings, net of tax

(7)

Other losses, pre-tax

(2)

(1)

Other losses, net of tax

(2)

(1)

Net Unrealized (Losses) Gains, Pre-tax

(7)

Net Unrealized (Losses) Gains, Net of Tax

^[1]

(6)

Net actuarial/prior service (losses) gains, pre-tax

(275)

273

Net actuarial/prior service (losses) gains, net of tax

(202)

198

Prior service amortization/curtailment, pre-tax

(81)

(26)

(10)

Prior service amortization/curtailment, net of tax

(61)

(20)

(7)

Actuarial loss amortization/settlement, pre-tax

156

252

236

Actuarial loss amortization/settlement, net of tax

118

190

158

Fuji Xerox changes in defined benefit plans, net, pre-tax

(25)

Fuji Xerox changes in defined benefit plans, net, net of tax

(25)

Other (losses) gains, pre-tax

(21)

(138)

Other (losses) gains, net of tax

(21)

(138)

Divestiture - reclassification, pre-tax

148

Divestiture - reclassification, net of tax

148

Changes in Defined Benefit Plans Gains, Pre-tax

(65)

540

169

Changes in Defined Benefit Plans Gains, Net of Tax

^[1]

(10)

409

106

Other Comprehensive (Loss) Income, Pre-tax

(2)

310

659

Other Comprehensive (Loss) Income, Net of Tax

^[1]

183

590

Less: Other comprehensive income attributable to noncontrolling interests, pre-tax

Less: Other comprehensive income attributable to noncontrolling interests, net of tax

^[1]

Other Comprehensive (Loss) Income Attributable to Xerox, Pre-Tax

(2)

310

658

Other Comprehensive Income, Net Attributable to Xerox Holdings

^[1]

$ 46

$ 183

$ 589

Fuji Xerox Co., Ltd. and Xerox International Partners, The Sales | Discontinued Operations, Disposed of by Sale

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

Divestiture - reclassification, pre-tax

$ 165

[1]	Refer to Note 25 - Other Comprehensive (Loss) Income for gross components of Other Comprehensive Income, reclassification adjustments out of Accumulated Other Comprehensive Loss and related tax effects.

Finance Receivables, Net

12 Months Ended

Dec. 31, 2019

Supplemental Financial Information [Abstract]

Finance Receivables, Net

Accounts Receivable, Net

Accounts receivable, net were as follows:



	December 31,
	2019			2018
Invoiced	$	980		$	992
Accrued	311			334
Allowance for doubtful accounts	(55		)	(56		)
Accounts receivable, net	$	1,236		$	1,270

Accrued receivables includes amounts to be invoiced in the subsequent quarter for current services provided.

Accounts Receivable Sales Arrangements



	Year Ended December 31,
	2019		2018		2017
Accounts receivable sales⁽¹⁾	$	393	$	405	$	1,733
Deferred proceeds ⁽²⁾	—		—		164
Loss on sale of accounts receivable	3		3		10

_____________

(1)

(2)

Finance Receivables, Net



	December 31,
	2019			2018
Gross receivables	$	3,865		$	4,003
Unearned income	(425		)	(439		)
Subtotal	3,440			3,564
Residual values	—			—
Allowance for doubtful accounts	(89		)	(92		)
Finance Receivables, Net	3,351			3,472
Less: Billed portion of finance receivables, net	111			105
Less: Current portion of finance receivables not billed, net	1,158			1,218
Finance Receivables Due After One Year, Net	$	2,082		$	2,149

A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as follows:



	December 31,
	2019		2018
12 Months⁽¹⁾	$	1,490	$	1,543
24 Months	1,052		1,108
36 Months	728		755
48 Months	422		425
60 Months	158		158
Thereafter	15		14
Total	$	3,865	$	4,003

_____________


(1)	Includes amounts previously billed of $115 and $107 as of December 31, 2019 and 2018, respectively.

Finance Receivables - Allowance for Credit Losses and Credit Quality

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



Allowance for Credit Losses:	United States			Canada			Europe			Other⁽¹⁾		Total
Balance at December 31, 2017	$	56		$	15		$	35		$	2	$	108
Provision	12			3			9			—		24
Charge-offs	(17		)	(6		)	(18		)	—		(41		)
Recoveries and other⁽²⁾	2			—			(1		)	—		1
Balance at December 31, 2018	$	53		$	12		$	25		$	2	$	92
Provision	20			1			7			—		28
Charge-offs	(15		)	(5		)	(14		)	—		(34		)
Recoveries and other⁽²⁾	1			2			—			—		3
Balance at December 31, 2019	$	59		$	10		$	18		$	2	$	89
Finance Receivables Collectively Evaluated for Impairment:
December 31, 2018⁽³⁾⁽⁴⁾	$	1,946		$	335		$	1,239		$	44	$	3,564
December 31, 2019⁽³⁾	$	1,922		$	320		$	1,155		$	43	$	3,440

_____________


(1)	Includes developing market countries and smaller units.


(2)	Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.


(3)	Total Finance receivables exclude the allowance for credit losses of $89 and $92 at December 31, 2019 and 2018, respectively.


(4)	As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation.

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

•



	December 31, 2019								December 31, 2018
	Investment Grade		Non-investment Grade		Sub-standard		Total Finance Receivables		Investment Grade		Non-investment Grade		Sub-standard		Total Finance Receivables
Direct	$	640	$	331	$	132	$	1,103	$	785	$	348	$	104	$	1,237
Indirect	258		445		116		819		162		400		147		709
Total United States⁽¹⁾	898		776		248		1,922		947		748		251		1,946
Total Canada	163		91		66		320		162		99		74		335
France	206		137		24		367		232		157		29		418
U.K/Ireland	154		79		8		241		150		87		7		244
Central⁽²⁾	176		113		9		298		196		123		8		327
Southern⁽³⁾	65		125		15		205		52		136		17		205
Nordic⁽⁴⁾	23		19		2		44		28		15		2		45
Total Europe⁽⁵⁾	624		473		58		1,155		658		518		63		1,239
Other	31		12		—		43		31		13		—		44
Total	$	1,716	$	1,352	$	372	$	3,440	$	1,798	$	1,378	$	388	$	3,564

_____________


(1)	As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation.


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


(3)	Italy, Greece, Spain and Portugal.


(4)	Sweden, Norway, Denmark and Finland.


(5)	Prior year amounts have been recasted to conform to the current year presentation.



	December 31, 2019
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	37	$	11	$	8	$	56	$	1,047	$	1,103	$	57
Indirect	25		5		3		33		786		819		—
Total United States	62		16		11		89		1,833		1,922		57
Canada	8		1		1		10		310		320		17
France	3		—		—		3		364		367		15
U.K./Ireland	2		—		—		2		239		241		—
Central⁽¹⁾	2		—		1		3		295		298		13
Southern⁽²⁾	3		1		1		5		200		205		4
Nordic⁽³⁾	—		—		—		—		44		44		—
Total Europe	10		1		2		13		1,142		1,155		32
Other	2		1		—		3		40		43		—
Total	$	82	$	19	$	14	$	115	$	3,325	$	3,440	$	106



	December 31, 2018
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	38	$	11	$	7	$	56	$	1,181	$	1,237	$	54
Indirect	18		4		2		24		685		709		—
Total United States	56		15		9		80		1,866		1,946		54
Canada	7		2		1		10		325		335		22
France	5		—		—		5		413		418		14
U.K./Ireland	2		—		—		2		242		244		—
Central⁽¹⁾	1		1		1		3		324		327		6
Southern⁽²⁾	3		1		1		5		200		205		6
Nordic⁽³⁾	—		—		—		—		45		45		—
Total Europe	11		2		2		15		1,224		1,239		26
Other	2		—		—		2		42		44		—
Total	$	76	$	19	$	12	$	107	$	3,457	$	3,564	$	102

_____________


(1)	As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation.


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


(3)	Italy, Greece, Spain and Portugal.

(4)

Sweden, Norway, Denmark and Finland.

Supplementary Financial Information

12 Months Ended

Dec. 31, 2019

Supplementary Financial Information

The components of Other assets and liabilities were as follows:



	December 31,
	2019		2018
Other Current Assets
Income taxes receivable	$	27	$	14
Royalties, license fees and software maintenance	25		20
Restricted cash	—		1
Prepaid expenses	29		31
Derivative instruments	2		15
Advances and deposits	30		28
Other	88		82
Total Other Current Assets	$	201	$	191
Other Long-term Assets
Income taxes receivable	$	9	$	8
Prepaid pension costs	451		281
Derivative instruments	1		—
Internal use software, net	122		154
Restricted cash	55		63
Debt issuance costs, net	3		4
Customer contract costs, net	176		184
Operating lease right-of-use asset⁽¹⁾	319		—
Deferred compensation plan investments	19		16
Investments in affiliates, at equity⁽²⁾	46		43
Other	137		149
Total Other Long-term Assets	$	1,338	$	902
Accrued Expenses and Other Current Liabilities
Income taxes payable	$	7	$	33
Other taxes payable	79		77
Operating lease obligation⁽¹⁾	87		—
Financing lease obligation⁽¹⁾	2		—
Interest payable	38		41
Restructuring reserves	70		93
Restructuring related costs	37		—
Derivative instruments	8		1
Product warranties	6		5
Dividends payable	66		69
Distributor and reseller rebates/commissions	167		158
Unearned income and other revenue deferrals	158		155
Other	259		216
Total Accrued Expenses and Other Current Liabilities	$	984	$	848
Other Long-term Liabilities
Deferred taxes	$	37	$	51
Income taxes payable	64		18
Operating lease obligation⁽¹⁾	260		—
Finance lease obligation⁽¹⁾	5		—
Environmental reserves	9		9
Restructuring reserves	—		2
Other	137		189
Total Other Long-term Liabilities	$	512	$	269

_____________


(1)	2019 amounts relate to the adoption of ASC 842, Leases effective January 1, 2019. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 2 - Adoption of New Leasing Standard - Lessee for additional information.


(2)	Refer to Note 12 - Investments in Affiliates, at Equity for additional information.

Cash, Cash Equivalents and Restricted Cash

Restricted cash amounts were as follows:



	December 31,
	2019		2018
Cash and cash equivalents	$	2,740	$	1,081
Restricted cash
Litigation deposits in Brazil	55		61
Other restricted cash	—		3
Total Restricted Cash	55		64
Cash, cash equivalents and restricted cash of continuing operations	2,795		1,145
Cash, cash equivalents and restricted cash of discontinued operations	—		3
Cash, cash equivalents and restricted cash	$	2,795	$	1,148

Restricted cash primarily relates to escrow cash deposits made in Brazil associated with ongoing litigation. As more fully discussed in Note 21 - Contingencies and Litigation, various litigation matters in Brazil require us to make cash deposits to escrow as a condition of continuing the litigation. Restricted cash amounts are classified in our Consolidated Balance Sheets based on when the cash will be contractually or judicially released.

Restricted cash was reported in the Consolidated Balance Sheets as follows:



	December 31,
	2019		2018
Other current assets	$	—	$	1
Other long-term assets	55		63
Total Restricted cash	$	55	$	64

Pension and Other Benefit Liabilities



	December 31,
	2019		2018
Pension liabilities⁽¹⁾	$	1,616	$	1,386
Accrued compensation liabilities	69		73
Deferred compensation liabilities⁽²⁾	22		23
Pension and other benefit liabilities	$	1,707	$	1,482

__________________________


(1)	Refer to Note 19 - Employee Benefit Plans for additional information regarding pension liabilities.


(2)	As of December 31, 2019 and 2018, includes amounts measured at fair value on a recurring basis of $18 and $16, respectively, and amounts for executive deferred compensation of $4 and $7, respectively. Refer to Note 18 - Fair Value of Financial Assets and Liabilities for additional information regarding deferred compensation liabilities.

Summarized Cash Flow Information

Summarized cash flow information is as follows:



	Year Ended December 31,
	2019		2018		2017
Provision for receivables	$	49	$	40	$	46
Provision for inventory	24		30		27
Provision for product warranty	12		14		15
Depreciation of buildings and equipment	101		148		136
Depreciation and obsolescence of equipment on operating leases	225		249		265
Amortization of internal use software	59		81		65
Amortization of product software	—		—		4
Amortization of acquired intangible assets	45		48		53
Amortization of customer contract costs⁽¹⁾	93		100		4
Cost of additions to land, buildings and equipment	41		55		69
Cost of additions to internal use software	24		35		36
Common stock dividends - Xerox Holdings	229		255		274
Preferred stock dividends - Xerox Holdings	14		14		17
Payments to noncontrolling interests	14		17		18
Repurchases related to stock-based compensation - Xerox Holdings	28		9		15

__________________________

(1)

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Assets
Cash and cash equivalents	$ 2,740	$ 1,081
Accounts receivable, net	1,236	1,270
Billed portion of finance receivables, net	111	105
Finance receivables, net	1,158	1,218
Inventories	694	829
Assets of discontinued operations	0	19
Other current assets	201	191
Total current assets	6,140	4,713
Finance receivables due after one year, net	2,082	2,149
Equipment on operating leases, net	364	442
Land, buildings and equipment, net	426
Land, buildings and equipment, net		498
Intangible assets, net	199	220
Goodwill	3,900	3,858
Deferred tax assets	598	740
Assets of discontinued operations	0	1,352
Other long-term assets	1,338	902
Total Assets	15,047	14,874
Liabilities and Equity
Short-term debt and current portion of long-term debt	1,049	961
Accounts payable	1,053	1,073
Accrued compensation and benefits costs	349	348
Liabilities of discontinued operations	0	21
Accrued expenses and other current liabilities	984	848
Total current liabilities	3,435	3,251
Long-term debt	3,233	4,269
Pension and other benefit liabilities	1,707	1,482
Post-retirement medical benefits	352	350
Other long-term liabilities	512	269
Total Liabilities	9,239	9,621
Commitments and Contingencies (See Note 21)
Convertible Preferred Stock	214	214
Common stock	215	232
Additional paid-in capital	2,782	3,321
Treasury stock, at cost	(76)	(55)
Retained earnings	6,312	5,072
Accumulated other comprehensive loss	(3,646)	(3,565)
Xerox Holdings/Xerox shareholders’ equity	5,587	5,005
Noncontrolling interests	7	34
Total Equity	5,594	5,039
Total Liabilities and Equity	$ 15,047	$ 14,874
Common stock issued (shares)	214,621,000	231,690,000
Treasure stock (shares)	(2,031,000)	(2,067,000)
Common stock outstanding (shares)	212,590,000	229,623,000
Xerox Corporation
Assets
Cash and cash equivalents	$ 2,740	$ 1,081
Accounts receivable, net	1,236	1,270
Billed portion of finance receivables, net	111	105
Finance receivables, net	1,158	1,218
Inventories	694	829
Assets of discontinued operations	0	19
Other current assets	201	191
Total current assets	6,140	4,713
Finance receivables due after one year, net	2,082	2,149
Equipment on operating leases, net	364	442
Land, buildings and equipment, net	426
Land, buildings and equipment, net		498
Intangible assets, net	199	220
Goodwill	3,900	3,858
Deferred tax assets	598	740
Assets of discontinued operations	0	1,352
Other long-term assets	1,338	902
Total Assets	15,047	14,874
Liabilities and Equity
Short-term debt and current portion of long-term debt	1,049	961
Accounts payable	1,053	1,073
Accrued compensation and benefits costs	349	348
Liabilities of discontinued operations	0	21
Accrued expenses and other current liabilities	918	848
Total current liabilities	3,369	3,251
Long-term debt	3,233	4,269
Pension and other benefit liabilities	1,707	1,482
Post-retirement medical benefits	352	350
Other long-term liabilities	512	269
Total Liabilities	9,173	9,621
Commitments and Contingencies (See Note 21)
Convertible Preferred Stock	0	214
Common stock	0	232
Additional paid-in capital	3,266	3,321
Treasury stock, at cost	0	(55)
Retained earnings	6,247	5,072
Accumulated other comprehensive loss	(3,646)	(3,565)
Xerox Holdings/Xerox shareholders’ equity	5,867	5,005
Noncontrolling interests	7	34
Total Equity	5,874	5,039
Total Liabilities and Equity	$ 15,047	$ 14,874
Common stock issued (shares)	100,000
Common stock outstanding (shares)	100,000

Contingencies and Litigation (Tables)

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of loss contingencies by contingency

Below is a summary of our Brazilian tax contingencies:



	December 31, 2019		December 31, 2018
Tax contingency - unreserved	$	442	$	500
Escrow cash deposits	51		58
Surety bonds	135		106
Letters of credit	91		104
Liens on Brazilian assets	—		—

Equity Method Investments and Joint Ventures [Abstract]

Tabular disclosure of the loss contingencies that were reported in the period or disclosed as of the balance sheet date.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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+ Details

Employee Benefit Plans - Defined Benefit Plans Measured Using Significant Unobservable Inputs Level 3 (Details) - Pension Plan - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	$ 8,087
Fair value of plan assets - ending	8,878	$ 8,087
U.S.
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	2,358	3,224
Fair value of plan assets - ending	2,493	2,358
U.S. \| Real estate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	28
Fair value of plan assets - ending	15	28
U.S. \| Guaranteed insurance contracts
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	0
Fair value of plan assets - ending	0	0
U.S. \| Level 3
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	0
Fair value of plan assets - ending	5	0
U.S. \| Level 3 \| Real estate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	0	0
Purchases	5	0
Sales	0	0
Realized losses		(4)
Unrealized gains	0	4
Currency translation	0	0
Fair value of plan assets - ending	5	0
U.S. \| Level 3 \| Guaranteed insurance contracts
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	0
Fair value of plan assets - ending	0	0
Foreign Plan
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	5,729	6,308
Fair value of plan assets - ending	6,385	5,729
Foreign Plan \| Real estate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	367
Fair value of plan assets - ending	335	367
Foreign Plan \| Guaranteed insurance contracts
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	92
Fair value of plan assets - ending	90	92
Foreign Plan \| Level 3
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	308	244
Purchases	2	23
Sales	(9)	(7)
Realized losses		0
Unrealized gains	15	58
Currency translation	(2)	(10)
Fair value of plan assets - ending	314	308
Foreign Plan \| Level 3 \| Real estate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	210	137
Purchases	0	22
Sales	0	(1)
Realized losses		0
Unrealized gains	9	62
Currency translation	0	(10)
Fair value of plan assets - ending	219	210
Foreign Plan \| Level 3 \| Private equity funds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	6	7
Purchases	0	0
Sales	(5)	0
Realized losses		0
Unrealized gains	4	(4)
Currency translation	0	3
Fair value of plan assets - ending	5	6
Foreign Plan \| Level 3 \| Guaranteed insurance contracts
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of plan assets -beginning	92	100
Purchases	2	1
Sales	(4)	(6)
Realized losses		0
Unrealized gains	2	0
Currency translation	(2)	(3)
Fair value of plan assets - ending	$ 90	$ 92

Segment and Geographic Area Reporting - Revenue and Long-lived Assets by Geography (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($) service_offering	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| service_offering	1
Total Revenues	$ 9,066	$ 9,662	$ 9,991
Long-Lived Assets	1,231	1,094
United States
Segment Reporting Information [Line Items]
Total Revenues	5,429	5,610	5,790
Long-Lived Assets	769	670
Europe
Segment Reporting Information [Line Items]
Total Revenues	2,326	2,625	2,697
Long-Lived Assets	305	277
Other areas
Segment Reporting Information [Line Items]
Total Revenues	1,311	1,427	$ 1,504
Long-Lived Assets	$ 157	$ 147

Stock-Based Compensation - Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Unrecognized Compensation	$ 60
Aggregate intrinsic value of award outstanding, options	$ 8
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Outstanding at January 1 (shares)	3,559	2,856	1,807
Outstanding at January 1 (dollars per share)	$ 29.51	$ 30.65	$ 30.10
Granted (shares)	1,366	1,595	1,436
Granted (dollars per share)	$ 23.22	$ 27.82	$ 31.39
Vested (shares)	(1,666)	(214)	(117)
Vested (dollars per share)	$ 29.28	$ 30.39	$ 36.99
Cancelled/Expired (shares)	(414)	(678)	(270)
Cancelled/Expired (dollars per share)	$ 27.85	$ 30.04	$ 29.03
Outstanding at December 31 (shares)	2,845	3,559	2,856
Outstanding at December 31 (dollars per share)	$ 26.87	$ 29.51	$ 30.65
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Unrecognized Compensation	$ 30
Remaining Weighted-Average Vesting Period (Years)	1 year 7 months 6 days
Aggregate intrinsic value of award outstanding	$ 105
Total Intrinsic Value	55	$ 6	$ 3
Cash Received	0	0	0
Tax Benefit	$ 11	$ 2	$ 1
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Outstanding at January 1 (shares)	2,462	3,117	5,054
Outstanding at January 1 (dollars per share)	$ 29.83	$ 31.54	$ 33.98
Granted (shares)	1,433	1,060	1,349
Granted (dollars per share)	$ 19.46	$ 27.36	$ 32.80
Vested (shares)	(633)	(853)	(1,413)
Vested (dollars per share)	$ 29.56	$ 32.59	$ 37.44
Cancelled/Expired (shares)	(432)	(862)	(1,873)
Cancelled/Expired (dollars per share)	$ 27.50	$ 30.26	$ 34.59
Outstanding at December 31 (shares)	2,830	2,462	3,117
Outstanding at December 31 (dollars per share)	$ 24.99	$ 29.83	$ 31.54
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Unrecognized Compensation	$ 28
Remaining Weighted-Average Vesting Period (Years)	1 year 8 months 12 days
Aggregate intrinsic value of award outstanding	$ 104
Total Intrinsic Value	23	$ 21	$ 40
Cash Received	0	0	0
Tax Benefit	$ 6	$ 4	$ 12
Stock options
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at January 1 (shares)	1,022	0	0
Outstanding at January 1 (dollars per share)	$ 27.84	$ 0	$ 0
Granted (shares)	0	1,414	0
Granted (dollars per share)	$ 0	$ 27.88	$ 0
Canceled/expired (shares)	(92)	(392)	0
Canceled/expired (dollars per share)	$ 27.92	$ 27.98	$ 0
Exercised (shares)	(69)	0	0
Exercised (dollars per share)	$ 27.98	$ 0	$ 0
Outstanding at December 31 (shares)	861	1,022	0
Outstanding at December 31 (dollars per share)	$ 27.83	$ 27.84	$ 0
Exercisable at December 31 (shares)	233	39	0
Exercisable at December 31 (dollars per share)	$ 27.83	$ 27.98	$ 0
Unrecognized Compensation	$ 2
Remaining Weighted-Average Vesting Period (Years)	1 year 3 months 18 days
Cash Received	$ 2	$ 0	$ 0
Tax Benefit	0	0	0
Total Intrinsic Value	$ 1	$ 0	$ 0
Restricted Stock Award
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Granted (shares)	351
Granted (dollars per share)	$ 28.51

Adoption of New Leasing Standard - Lessee - Future Minimum Operating Lease Commitments (Details) $ in Millions	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 114
2020	88
2021	64
2022	50
2023	36
Thereafter	27
Total Operating lease commitments	$ 379

Investment in Affiliates, at Equity

12 Months Ended

Dec. 31, 2019

Investment in Affiliates, at Equity

As disclosed in Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 7 - Divestitures, in November 2019 Xerox Holdings sold its remaining indirect 25% equity interest in Fuji Xerox, which had been previously accounted for as an equity method investment. Accordingly, our remaining Investment in Affiliates, at Equity at December 31, 2019 largely consists of several minor investments in entities in the Middle East region.

Investments in corporate joint ventures and other companies in which we generally have a 20% to 50% ownership interest were as follows:



	December 31,
	2019		2018
Fuji Xerox⁽¹⁾	$	—	$	1,360
Other⁽²⁾	46		43
Investments in affiliates, at equity	$	46	$	1,403

_____________


(1)	Balance at December 31, 2018 reported in Other long-term assets of discontinued operations.


(2)	Balance at December 31, 2019 and 2018, respectively, reported in Other long-term assets.

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



	Year Ended December 31,
	2019		2018		2017
Fuji Xerox⁽¹⁾	$	147	$	25	$	102
Other	8		8		13
Total Equity in net income of unconsolidated affiliates	$	155	$	33	$	115

_____________


(1)	Equity in net income for Fuji Xerox is reported in Income from discontinued operations, net of tax for all years. The equity in net income for Fuji Xerox in 2019 is through the date of sale.

Fuji Xerox

Fuji Xerox is headquartered in Tokyo and operates in Japan, China, Australia, New Zealand, Vietnam and other areas of the Pacific Rim. Equity in net income of Fuji Xerox is affected by certain adjustments to reflect the deferral of profit associated with intercompany sales. These adjustments may result in recorded equity income that is different from that implied by our (former) 25% ownership interest. In addition, the Equity in net income of Fuji Xerox for the three years ended December 31, 2019, 2018 and 2017, includes after-tax restructuring and other charges of $20, $95 and $10, respectively.

We also received dividends from Fuji Xerox for the three years ended December 31, 2019, 2018 and 2017, which are reflected as a reduction in our investment upon receipt, of $69, $23 and $46, respectively.

Summarized financial information for Fuji Xerox is as follows:



	Through Date of Sale		Year Ended December 31,
	2019		2018		2017
Summary of Operations
Revenues	$	7,667	$	9,161	$	9,638
Costs and expenses	6,814		8,880		9,072
Income before income taxes	853		281		566
Income tax expense	258		160		144
Net Income	595		121		422
Less: Net income - noncontrolling interests	3		2		5
Net Income - Fuji Xerox	$	592	$	119	$	417

Balance Sheet	At Date of Sale		December 31, 2018		December 31, 2017
Assets
Current assets	$	4,876	$	4,179	$	4,315
Long-term assets	3,964		4,034		4,488
Total Assets	$	8,840	$	8,213	$	8,803
Liabilities and Equity
Short-term debt	$	49	$	130	$	428
Other current liabilities	1,932		1,827		2,079
Long-term debt	16		24		76
Other long-term liabilities	514		395		369
Noncontrolling interests	18		30		33
Fuji Xerox shareholders' equity	6,311		5,807		5,818
Total Liabilities and Equity	$	8,840	$	8,213	$	8,803

Yen/U.S. Dollar exchange rates used to translate are as follows:



Financial Statement	Exchange Basis	2019	2018	2017
Summary of Operations	Weighted average rate	109.03	110.28	112.14
Balance Sheet	Year-end rate	108.83	110.26	112.87

Transactions with Fuji Xerox

We have a Technology Agreement with Fuji Xerox whereby we receive royalty payments for their use of our Xerox brand trademark, as well as rights to access our patent portfolio in exchange for access to their patent portfolio. These payments are included in Services, maintenance and rentals revenues in the Consolidated Statements of Income. Refer to Note 27 - Subsequent Events for additional information regarding our Technology Agreement with FX.

We also have arrangements with Fuji Xerox whereby we purchase inventory from and sell inventory to Fuji Xerox. Pricing of the transactions under these arrangements is based upon terms the Company believes to be negotiated at arm's length. Our purchase commitments with Fuji Xerox are in the normal course of business and typically have a lead time of three months. In addition, we pay Fuji Xerox and they pay us for unique research and development costs. As disclosed in Note 7 - Divestitures, these agreements will continue after the sale of our Investment in Fuji Xerox.

Transactions with Fuji Xerox were as follows:



	Year Ended December 31,
	2019		2018		2017
Royalty revenue earned	$	99	$	96	$	103
Inventory purchases from Fuji Xerox	1,337		1,501		1,585
Inventory sales to Fuji Xerox	33		43		58
R&D payments received from Fuji Xerox	—		1		1
R&D payments paid to Fuji Xerox	4		8		14

As of December 31, 2019 and 2018, net amounts due to Fuji Xerox were $353 and $320, respectively.

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Schedule of stock-based compensation expense, tax effect

Stock-based compensation expense was as follows:



	Year Ended December 31,
	2019		2018		2017
Stock-based compensation expense, pre-tax	$	50	$	57	$	52
Income tax benefit recognized in earnings	13		14		20

Schedule of stock-based payment award valuation assumptions, performance shares, market-based component table

A summary of Xerox Holdings key valuation input assumptions used in the Monte Carlo simulation relative to the 2019 and 2018 PSU awards granted were as follows:



	2019 Award			2018 Award
Term	3 years			3 years
Risk-free interest rate⁽¹⁾	2.51		%	2.39		%
Dividend yield⁽²⁾	3.97		%	3.24		%
Volatility⁽³⁾	32.95		%	29.12		%
Weighted average fair value⁽⁴⁾	$	16.27		$	32.01

____________


(1)	The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the performance period.


(2)	The dividend yield was calculated as the expected quarterly dividend divided by our three-month average stock price as of the valuation date, annualized and continuously compounded.


(3)	Volatility is derived from historical stock prices as well as implied volatility when appropriate and available.

(4)

The weighted-average of fair values used to record compensation expense as determined by the Monte Carlo simulation.

TSR payout as a percentage, comparison to peer group



Total Return Targets⁽¹⁾	Payout Percentage
$40.00 and above	200	%
$35.00	100	%
$30.00	50	%
Below $30.00	0	%

Our 2018 TSR metric compared to the peer group TSR will determine the payout as follows:



Percentile	Payout as Percent of Target⁽¹⁾
80th and above	200	%
50th	100	%
25th	35	%
Below 25th	0	%

____________

(1)

For performance between the levels described above, the degree of vesting is interpolated on a linear basis.

Schedule of share-based payment award, stock options, valuation assumptions

weighted average assumptions used in the BS option-pricing model relative to SO awards were as follows:



	2018 Award
Expected term⁽¹⁾	6.13 years
Expected volatility⁽²⁾	27.25	%
Expected dividend yield⁽³⁾	3.25	%
Risk-free interest rate⁽⁴⁾	2.63	%
Weighted average fair value⁽⁵⁾	$5.71

____________


(1)	Since these SO grants were effectively part of a new program, the expected term was calculated using the "Simplified Method” under the SEC guidance based on the SOs vesting schedule and contractual term. We did not have sufficient historical exercise data to provide a reasonable basis to estimate an expected term.


(2)	The expected volatility was calculated based on a combination of term-matched historical volatility and implied volatility from traded options.


(3)	The dividend yield was calculated as the expected quarterly dividend divided by our three-month average stock price as of the grant date.


(4)	The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve with a maturity matched to the expected term of the SOs.

(5)

The weighted average of fair values used to record compensation expense as determined by the BS option-pricing model.

Schedule of share-based compensation arrangements by share-based payment award

Summary of Stock-based Compensation Activity



	2019				2018				2017
	Shares		Weighted Average Grant Date Fair Value⁽¹⁾		Shares		Weighted Average Grant Date Fair Value⁽¹⁾		Shares		Weighted Average Grant Date Fair Value
Restricted Stock Units⁽²⁾
Outstanding at January 1	3,559		$	29.51	2,856		$	30.65	1,807		$	30.10
Granted	1,366		23.22		1,595		27.82		1,436		31.39
Vested	(1,666	)	29.28		(214	)	30.39		(117	)	36.99
Forfeited	(414	)	27.85		(678	)	30.04		(270	)	29.03
Outstanding at December 31	2,845		26.87		3,559		29.51		2,856		30.65
Performance Shares
Outstanding at January 1	2,462		$	29.83	3,117		$	31.54	5,054		$	33.98
Granted	1,433		19.46		1,060		27.36		1,349		32.80
Vested	(633	)	29.56		(853	)	32.59		(1,413	)	37.44
Forfeited/Expired	(432	)	27.50		(862	)	30.26		(1,873	)	34.59
Outstanding at December 31	2,830		24.99		2,462		29.83		3,117		31.54
Stock Options
Outstanding at January 1	1,022		$	27.84	—		$	—	—		$	—
Granted	—		—		1,414		27.88		—		—
Forfeited/Expired	(92	)	27.92		(392	)	27.98		—		—
Exercised	(69	)	27.98		—		—		—		—
Outstanding at December 31	861		27.83		1,022		27.84		—		—
Exercisable at December 31	233		27.83		39		27.98		—		—

____________


(1)	Exercise price for stock options.


(2)	Includes a 2018 Restricted Stock Award (RSA) grant of 351 shares with a corresponding grant date fair value of $28.51, which vested in 2019.

Schedule of unrecognized compensation cost, nonvested awards

Unrecognized compensation cost related to non-vested stock-based awards at December 31, 2019 was as follows:



Awards	Unrecognized Compensation		Remaining Weighted-Average Vesting Period (Years)
Restricted Stock Units	$	30	1.6
Performance Shares	28		1.7
Stock Options	2		1.3
Total	$	60

Schedule of aggregate intrinsic value restricted stock and performance shares compensation awards

The aggregate intrinsic value of outstanding stock-based awards was as follows:



Awards	December 31, 2019
Restricted Stock Units	$	105
Performance Shares	104
Stock Options	8

Schedule of vested and exercised stock based awards total intrinsic value and tax benefit realized

The intrinsic value and actual tax benefit realized for all vested and exercised stock-based awards was as follows:



	December 31, 2019						December 31, 2018						December 31, 2017
Awards	Total Intrinsic Value⁽¹⁾		Cash Received		Tax Benefit		Total Intrinsic Value		Cash Received		Tax Benefit		Total Intrinsic Value		Cash Received		Tax Benefit
Restricted Stock Units	$	55	$	—	$	11	$	6	$	—	$	2	$	3	$	—	$	1
Performance Share Units	23		—		6		21		—		4		40		—		12
Stock Options	1		2		—		—		—		—		—		—		—

____________

(1)

RSUs include a RSA grant of 351 shares, which vested in 2019.

Contingencies and Litigation

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Litigation

As more fully discussed below, we are involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities law; governmental entity contracting, servicing and procurement law; intellectual property law; environmental law; employment law; the Employee Retirement Income Security Act (ERISA); and other laws and regulations. We determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. We assess our potential liability by analyzing our litigation and regulatory matters using available information. We develop our views on estimated losses in consultation with outside counsel handling our defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs.

Additionally, guarantees, indemnifications and claims arise during the ordinary course of business from relationships with suppliers, customers and nonconsolidated affiliates, as well as through divestitures and sales of businesses, when the Company undertakes an obligation to guarantee the performance of others if specified triggering events occur. Nonperformance under a contract could trigger an obligation of the Company. These potential claims include actions based upon alleged exposures to products, real estate, intellectual property such as patents, environmental matters, and other indemnifications. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims. However, while the ultimate liabilities resulting from such claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the Company's consolidated financial position or liquidity. As of December 31, 2019, we have accrued our estimate of liability incurred under our indemnification arrangements and guarantees.

Brazil Contingencies

Our Brazilian operations have received or been the subject of numerous governmental assessments related to indirect and other taxes. These tax matters principally relate to claims for taxes on the internal transfer of inventory, municipal service taxes on rentals and gross revenue taxes. We are disputing these tax matters and intend to vigorously defend our positions. Based on the opinion of legal counsel and current reserves for those matters deemed probable of loss, we do not believe that the ultimate resolution of these matters will materially impact our results of operations, financial position or cash flows. Below is a summary of our Brazilian tax contingencies:



	December 31, 2019		December 31, 2018
Tax contingency - unreserved	$	442	$	500
Escrow cash deposits	51		58
Surety bonds	135		106
Letters of credit	91		104
Liens on Brazilian assets	—		—

The decrease in the unreserved portion of the tax contingency, inclusive of any related interest, was primarily related to closed cases. With respect to the unreserved tax contingency, the majority has been assessed by management as

being remote as to the likelihood of ultimately resulting in a loss to the Company. In connection with the above proceedings, customary local regulations may require us to make escrow cash deposits or post other security of up to half of the total amount in dispute, as well as additional surety bonds and letters of credit, which include associated indexation. Generally, any escrowed amounts would be refundable and any liens on assets would be removed to the extent the matters are resolved in our favor. We are also involved in certain disputes with contract and former employees. Exposures related to labor matters are not material to the financial statements as of December 31, 2019. We routinely assess all these matters as to probability of ultimately incurring a liability against our Brazilian operations and record our best estimate of the ultimate loss in situations where we assess the likelihood of an ultimate loss as probable.

Litigation Against the Company

Pending Litigation Relating to the Fuji Transaction:


1.	Deason v. Fujifilm Holdings Corp., et al.; Deason v. Xerox Corp., et al.; In re Xerox Corporation Consolidated Shareholder Litigation:

In February 2018, five complaints (the "Fuji Transaction Shareholder Lawsuits"), including four putative class actions (which have been consolidated), were filed by Xerox shareholders in the Supreme Court of the State of New York, County of New York (the "Court") in connection with the proposed transaction to combine Xerox and Fuji Xerox (the “Fuji Transaction”). All of the complaints named as defendants Xerox, its directors, and FUJIFILM Holdings Corporation (“Fujifilm”). The complaint in one of the actions also named as a defendant Ursula M. Burns, the former Chief Executive Officer of Xerox. The plaintiffs alleged, among other things, that Xerox's directors breached their fiduciary duties in negotiating, approving, and purportedly making false and misleading disclosures about the Fuji Transaction, and that Fujifilm aided and abetted those breaches. The complaint in one of the actions further alleged that Xerox and the director defendants engaged in common law fraud by purportedly failing to disclose information about the joint venture agreements between Xerox and Fujifilm. The Fuji Transaction Shareholder Lawsuits sought injunctive relief preventing the previously proposed transactions, and/or additional disclosures by Xerox’s directors, unspecified damages from Xerox’s directors, costs and attorneys’ fees, as well as other relief.

One of the Fuji Transaction Shareholder Lawsuits was brought by Darwin Deason, a Xerox shareholder ("Deason I"). Another complaint was filed by Mr. Deason against Xerox and its directors in the same Court on March 2, 2018 ("Deason II") alleging that defendants breached their fiduciary duties by refusing Mr. Deason’s request for a waiver of the deadline for nomination of a new slate of Xerox directors. In Deason II, Mr. Deason sought to enjoin Xerox and its directors from enforcing Xerox’s advance notice by-laws, thereby allowing Mr. Deason to proceed with the nominations, as well as costs, fees, and other relief.

On April 27, 2018, the Court issued decisions and orders granting plaintiffs’ preliminary injunction motions, which (i) enjoined Xerox from “taking any further action to consummate the change of control transaction between Xerox and Fuji that was announced on January 31, 2018 pending a final determination of the claims asserted in the underlying action;” (ii) enjoined Xerox from enforcing its advance notice bylaw provision requiring shareholders to nominate directors for election at the 2018 annual shareholder meeting by December 11, 2017; and (iii) required Xerox to waive such advance notice bylaw provision to permit the noticing of a slate of director nominees for election at the 2018 annual shareholder meeting, and denying defendants’ motions to dismiss.

On May 1, 2018, Xerox entered into a Director Appointment, Nomination and Settlement Agreement (the “Initial Settlement Agreement”) with Mr. Deason and Carl C. Icahn and certain of his affiliates who were also Xerox shareholders (the "Icahn Group"), among others, that would have resolved Deason I, Deason II and the pending proxy contest in connection with Xerox’s 2018 Annual Meeting of Shareholders. The Initial Settlement Agreement expired by its terms on May 3, 2018 without becoming effective.

On May 7, 2018, defendants filed with the Supreme Court of the State of New York, Appellate Division, First Judicial Department, notices of appeal of, and motions to stay pending appeal, the lower Court’s decision and order. Defendants also moved the appellate court for interim relief ordering that the appeal be heard on an expedited basis. At a hearing before the appellate court on May 7, 2018, the appellate court ruled that the appeals would be heard on an expedited basis and granted a partial interim stay allowing Xerox and Fujifilm to take steps to seek regulatory approvals related to the Fuji Transaction pending a ruling from the appellate court on defendants’ motions to stay pending appeal.

On May 13, 2018, a second Director Appointment, Nomination and Settlement Agreement (the "Final Settlement Agreement") with respect to Deason I, Deason II and the pending proxy contest in connection with Xerox's 2018 Annual Meeting of Shareholders that was initiated by the Icahn Group was signed on behalf of Mr. Deason, the Icahn Group and all defendants except Fujifilm, and a memorandum of understanding regarding settlement of the putative class case was signed by all defendants except Fujifilm. Pursuant to the settlements, the settling defendants withdrew their appeal and motion to stay in Deason I and Deason II. The settling defendants also withdrew their motion to stay in

the putative class case. The Court entered a stipulation of discontinuance as to the settling parties in Deason II on May 14, 2018, and agreed on June 22, 2018 to do the same in Deason I.

On June 14, 2018, Fujifilm filed answers in Deason I and the putative class case, along with cross-claims against the members of the Xerox Board (as constituted before May 13, 2018) and a third-party complaint against Xerox director Jonathan Christodoro, seeking contribution for any potential award against Fujifilm for aiding and abetting purported breaches of fiduciary duties.

On June 19, 2018, the putative class plaintiffs filed a motion for preliminary approval of a stipulation of settlement that would resolve the claims asserted by the plaintiffs in the putative class case against all defendants, other than Fujifilm. Carmen Ribbe, the plaintiff in the below derivative action, and Fujifilm filed oppositions to the motion on July 10, 2018.

On June 22, 2018, the Court entered an order denying a joint motion by the putative class plaintiffs and the settling defendants to dissolve the injunction in the putative class case as against the settling defendants, and entered an order denying Fujifilm’s motion to dissolve the injunctions in the putative class case and Deason I in their entirety.

On July 16, 2018, the Court held a hearing concerning the putative class plaintiffs’ motion for preliminary approval of the settlement in the putative class case. The Court indicated that it was not inclined to consider motions for approval of the settlement prior to considering whether the putative class should be certified.

On August 2, 2018, the Appellate Division entered orders recognizing the Xerox defendants’ withdrawal of their appeal in the Deason cases and denying all appellants’ motions to stay pending determination of appeals in the Deason and putative class cases.

On August 2, 2018, the Appellate Division entered orders (i) at their request, deeming withdrawn the Xerox defendants’ appeal and motion to stay in the Deason cases; (ii) upon their request, deeming withdrawn the Xerox defendants’ motion to stay, pending determination of appeal, the putative class case; and (iii) denying Fujifilm’s motion to stay pending determination of its appeals in the Deason and putative case cases.

On September 21, 2018, putative class plaintiffs filed a motion for certification of a settlement class and a motion to transmit notice of the proposed settlement to the proposed class. On October 17, 2018, derivative plaintiff Carmen Ribbe and Fujifilm filed oppositions to the putative class plaintiffs’ motion to transmit notice to the proposed class. The class has not yet been certified, and preliminary approval has not been granted.

The Appellate Division heard oral argument on September 25, 2018 on Fujifilm’s appeal of the Court’s decision. On October 16, 2018, the Appellate Division entered a decision and order reversing the Court’s rulings, ordering that the claims brought against Fujifilm in the cases by Mr. Deason and the purported class be dismissed, and further ordering that the preliminary injunction of the proposed Fuji Transaction be dissolved (the “Appellate Decision and Order”).

On November 15, 2018, the putative class plaintiffs filed with the Appellate Division a motion seeking the opportunity to reargue Fujifilm’s appeal or, in the alternative, for leave to appeal the Appellate Decision and Order to the New York State Court of Appeals.

On December 6, 2018, pursuant to the Appellate Decision and Order, the Court entered a judgment dismissing the complaints against Fujifilm in Deason I and the putative class case. The Court further issued orders denying the putative class plaintiffs’ motion for class certification, without prejudice to renewing the motion after the outcome of any appeals of the Appellate Decision and Order.

On January 8, 2019, the Court entered an order staying all further proceedings in Deason I and the putative class case until thirty days after exhaustion of appeals, including any appeals to the New York State Court of Appeals, of the Appellate Decision and Order. On January 9, 2019, the Court entered an order denying the putative class plaintiffs’ motion to transmit notice to the proposed class, without prejudice to renewal of their motion at a later time.

On October 31, 2018 and January 3, 2019, respectively, Xerox and the Xerox director defendants in the putative class case filed with the Appellate Division a request and motion seeking an extension, until after any decision regarding approval of settlement of the putative class action, of the deadline by which to perfect their appeal of the Court’s April 27, 2018 decision and order. On May 16, 2019, the Appellate Division entered an order granting the motion and extended the deadline until the October 2019 Term.

On February 21, 2019, the Appellate Division issued an order denying the putative class plaintiffs’ motion seeking to reargue Fujifilm’s appeal or, in the alternative, for leave to appeal the Appellate Decision and Order to the New York State Court of Appeals. No further notice of appeal was filed, and the Appellate Decision and Order became final and unappealable on March 26, 2019.

On May 3, 2019, putative class plaintiffs filed a renewed motion for approval of the form of a notice to putative class members. On May 6, 2019, putative class plaintiffs filed a renewed motion for class certification and notice of motion to approve class settlement and proposed final approval order. On May 24, 2019, the Court entered an order approving the form notice and proposed manner of its dissemination.

On June 6, 2019, the Court entered an order pursuant to which plaintiffs submitted their motion to approve attorneys’ fees and expenses on July 19, 2019; requiring filing of any objections to or opt-outs from the proposed putative class settlement by August 9, 2019; and setting September 6, 2019 for its hearing on putative class plaintiffs’ motion for class certification and settlement approval. The hearing took place, and on September 12, 2019, the Court entered a decision and order denying both motions.

At a conference held on November 19, 2019, the Court so-ordered the parties' joint stipulation and proposed order of discontinuance without prejudice, without payment by any party.


2.	Ribbe v. Jacobson, et al.:

On April 11, 2019, Carmen Ribbe filed a putative derivative and class action stockholder complaint in the Supreme Court of the State of New York for New York County, naming as defendants Xerox, current Board members Gregory Q. Brown, Joseph J. Echevarria, Cheryl Gordon Krongard, Sara Martinez Tucker, Keith Cozza, Giovanni G. Visentin, Jonathan Christodoro, Nicholas Graziano, and A. Scott Letier, and former Board members Jeffrey Jacobson, William Curt Hunter, Robert J. Keegan, Charles Prince, Ann N. Reese, and Stephen H. Rusckowski. Plaintiff previously filed a putative shareholder derivative lawsuit on May 24, 2018 against certain of these defendants, as well as others, in the same court; that lawsuit was dismissed without prejudice on December 6, 2018. The new complaint included putative derivative claims on behalf of Xerox for breach of fiduciary duty against the members of the Xerox Board who approved Xerox’s entry into agreements to settle the Deason and In re Xerox Corporation Consolidated Shareholder Litigation (“XCCSL”) actions (described above). Plaintiff alleges that the settlements ceded control of the Board and the Company to Darwin Deason and Carl C. Icahn without a vote by, or compensation to, other Xerox stockholders; improperly provided certain benefits and releases to the resigning and continuing directors; and subjected Xerox to potential breach of contract damages in an action by Fuji relating to Xerox’s termination of the proposed Fuji Transaction. Plaintiff also alleges that the current Board members breached their fiduciary duties by allegedly rejecting plaintiff’s January 14, 2019 shareholder demand on the Board to remedy harms arising from entry into the Deason and XCCSL settlements. The new complaint further included direct claims for breach of fiduciary duty on behalf of a putative class of current Xerox stockholders other than Mr. Deason, Mr. Icahn, and their affiliated entities (the “Ribbe Class”) against the defendants for causing Xerox to enter into the Deason and XCCSL settlements, which plaintiff alleges perpetuated control of Xerox by Mr. Icahn and Mr. Deason and denied the voting franchise of Xerox shareholders. Among other things, plaintiff seeks damages in an unspecified amount for the alleged fiduciary breaches in favor of Xerox against defendants jointly and severally; rescission or reformation of the Deason and XCCSL settlements; restitution of funds paid to the resigning directors under the Deason settlement; an injunction against defendants’ engaging in the alleged wrongful practices and equitable relief affording the putative Ribbe Class the ability to determine the composition of the Board; costs and attorneys’ fees; and other further relief as the Court may deem proper.

Defendants accepted service of the complaint as of May 16, 2019. On June 4, 2019, the Court entered an order setting a briefing schedule for defendants’ motions to dismiss the complaint. On July 12, 2019, plaintiff filed a motion to preclude defendants from referencing in their motions to dismiss the formation of, or work by, the committee of the Board established to investigate plaintiff’s shareholder demand. On July 18, 2019, the Court denied plaintiff’s motion and adjourned sine die the deadline by which defendants must file any motions to dismiss the complaint.

On January 6, 2020, plaintiff filed his first amended complaint (“FAC”). The FAC includes many of plaintiff’s original allegations regarding the 2018 shareholder litigation and settlements, as well as additional allegations, including, among others, that the members of the Special Committee of the Board that investigated plaintiff’s demand lacked independence and wrongfully refused to pursue the claims in the demand; allegations that an agreement announced in November 2019 for, among other things, the sale by Xerox of its interest in Fuji Xerox to Fujifilm and dismissal of Fujifilm’s breach of contract lawsuit against Xerox (the “FX Sale Transaction”), was unfavorable to Xerox; and allegations about a potential acquisition by Xerox of HP similar to those in the Miami Firefighters derivative action described below. In addition to the claims in the April 11, 2019 complaint, the FAC adds as defendants Carl C. Icahn, Icahn Capital LP, and High River Limited Partnership (the “Icahn defendants”) and asserts claims against those defendants and the Board similar to those in Miami Firefighters relating to the Icahn defendants’ purchases of HP stock allegedly with knowledge of material nonpublic information concerning Xerox’s potential acquisition of HP. In addition to the relief sought in Ribbe’s prior complaint, the FAC seeks relief similar to that sought in Miami Firefighters relating to the Icahn defendants’ alleged purchases of HP stock.

On January 21, 2020, plaintiff in the Miami Firefighters action filed a motion seeking to intervene in Ribbe and to have stayed, or alternatively, severed and consolidated with the Miami Firefighters action, any claims first filed in Miami Firefighters and later asserted by Ribbe. At a conference held on February 25, 2020, the Court denied the motion to intervene without prejudice.

Xerox will vigorously defend against this matter. At this time, it is premature to make any conclusion regarding the probability of incurring material losses in this litigation. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement, there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in determination, judgment, or settlement occurs.


3.	Fujifilm Holdings Corp. v. Xerox Corporation:

On June 18, 2018, Fujifilm filed a complaint against Xerox in the U.S. District Court for the Southern District of New York, relating to the Fuji Transaction agreements. The complaint alleges that Xerox: (1) willfully breached the Fuji Transaction agreements by purporting to terminate them to appease Messrs. Icahn and Deason and using as a pretext issues with Fujifilm’s untimely submitted financials, and by settling Deason I and Deason II without notice to or consent by Fujifilm; (2) willfully breached the implied covenant of good faith and fair dealing by failing to support and use best efforts to conclude the Fuji Transaction, thus depriving Fujifilm of the benefit of its bargain; and (3) effected a change in Xerox’s recommendation regarding the Fuji Transaction, entitling Fujifilm to terminate the Fuji Transaction agreements and to receive from Xerox a $183 termination fee. Fujifilm seeks a judgment for damages to be determined at trial in an amount in excess of $1.0 billion plus punitive damages; a declaration regarding the alleged change in recommendation such that Fujifilm may terminate the transaction and Xerox must pay the $183 termination fee and other remedies; costs and attorneys’ fees; and other relief the court may deem appropriate.

At a conference on September 24, 2018, the Court stayed all discovery pending resolution of Xerox’s motion to dismiss. Xerox filed its motion to dismiss on October 1, 2018. On February 22, 2019, following oral argument, the Court denied the motion to dismiss.

On March 12, 2019, the Court entered a scheduling order setting various case deadlines. Xerox filed its answer denying the claims on March 15, 2019. Discovery has commenced and is ongoing. On June 24, 2019 and August 12, 2019, the Court entered stipulated revised scheduling orders extending certain case deadlines.

In November 2019, the parties entered into a Dismissal and Release Agreement pursuant to which, on November 12, 2019, they filed a joint stipulation of dismissal with prejudice. No payment by Xerox was required.


4.	Miami Firefighters’ Relief & Pension Fund v. Icahn, et al.:

On December 13, 2019, alleged shareholder Miami Firefighters’ Relief & Pension Fund (“Miami Firefighters”) filed a purported derivative complaint in New York State Supreme Court, New York County on behalf of Xerox Holdings Corporation ("Xerox Holdings") (as nominal defendant) against Carl Icahn and his affiliated entities High River Limited Partnership and Icahn Capital LP (the "Icahn defendants"), Xerox Holdings, and all current Xerox Holdings directors (the "Directors"). Plaintiff made no demand on the Board before bringing the action, but instead alleges that doing so would be futile because the Directors lack independence due to alleged direct or indirect relationships with Icahn. Among other things, the complaint alleges that Icahn controls and dominates Xerox Holdings and therefore owes a fiduciary duty of loyalty to Xerox Holdings, which he breached by acquiring HP stock at a time when he knew that Xerox Holdings was considering an offer to acquire HP or had knowledge of the "obvious merits" of such potential acquisition, and that the Icahn defendants’ holdings of HP common stock have risen in market value by approximately $128 since disclosure of the offer. The complaint includes four causes of action: breach of fiduciary duty of loyalty against the Icahn defendants; breach of contract against the Icahn defendants (for purchasing HP stock in violation of Icahn’s confidentiality agreement with Xerox Holdings); unjust enrichment against the Icahn defendants; and breach of fiduciary duty of loyalty against the Directors (for any consent to the Icahn defendants’ purchases of HP common stock while Xerox Holdings was considering acquiring HP). The complaint seeks a judgment of breach of fiduciary duties against the Icahn defendants and the Directors; a declaration that Icahn breached his confidentiality agreement with Xerox Holdings; a constructive trust on Icahn Capital and High River's investments in HP securities; disgorgement to Xerox Holdings of profits Icahn Capital and High River earned from trading in HP stock; payment of unspecified damages by the Directors for breaching fiduciary duties; and attorneys' fees, costs, and other relief the Court deems just and proper. On January 15, 2020, the Court entered an order granting plaintiff’s unopposed motion to consolidate with Miami Firefighters a similar action filed on December 26, 2019 by alleged shareholder Steven J. Reynolds against the same parties in the same court, and designating Miami Firefighters’ counsel as lead counsel in the consolidated action. On January 21, 2020, plaintiff filed a motion seeking to intervene in Ribbe v. Jacobson, et al., described above, and to have stayed, or alternatively, severed and consolidated with this action, any claims first filed in this action and

later asserted by Ribbe. At a conference held on February 25, 2020, the Court denied the motion to intervene without prejudice.

Xerox Holdings will vigorously defend against this matter. At this time, it is premature to make any conclusion regarding the probability of incurring material losses in this litigation. Should developments cause a change in our determination as to an unfavorable outcome, or result in a final adverse judgment or settlement, there could be a material adverse effect on our results of operations, cash flows and financial position in the period in which such change in determination, judgment, or settlement occurs.

Guarantees, Indemnifications and Warranty Liabilities

Indemnifications Provided as Part of Contracts and Agreements

Acquisitions/Divestitures:

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

Other Agreements:

We are also party to the following types of agreements pursuant to which we may be obligated to indemnify the other party with respect to certain matters:


•	Guarantees on behalf of our subsidiaries with respect to real estate leases. These lease guarantees may remain in effect subsequent to the sale of the subsidiary.


•	Agreements to indemnify various service providers, trustees and bank agents from any third-party claims related to their performance on our behalf, with the exception of claims that result from a third-party's own willful misconduct or gross negligence.


•	Guarantees of our performance in certain sales and services contracts to our customers and indirectly the performance of third parties with whom we have subcontracted for their services. This includes indemnifications to customers for losses that may be sustained as a result of the use of our equipment at a customer's location.

In each of these circumstances, our payment is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract and such procedures also typically allow us to challenge the other party's claims. In the case of lease guarantees, we may contest the liabilities asserted under the lease. Further, our obligations under these agreements and guarantees may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments we made.

Patent Indemnifications

In most sales transactions to resellers of our products, we indemnify against possible claims of patent infringement caused by our products or solutions. In addition, we indemnify certain software providers against claims that may arise as a result of our use or our subsidiaries', customers' or resellers' use of their software in our products and solutions. These indemnities usually do not include limits on the claims, provided the claim is made pursuant to the procedures required in the sales contract.

Indemnification of Officers and Directors

Xerox Holdings' and our corporate by-laws require that, except to the extent expressly prohibited by law, we must indemnify Xerox Holdings' and Xerox's officers and directors, respectively, against judgments, fines, penalties and amounts paid in settlement, including legal fees and all appeals, incurred in connection with civil or criminal action or proceedings, as it relates to their services to Xerox Holdings and/or Xerox Corporation and their subsidiaries. Although the by-laws provide no limit on the amount of indemnification, Xerox Holdings or we may have recourse against our

insurance carriers for certain payments made by Xerox Holdings or us. However, certain indemnification payments (such as those related to "clawback" provisions in certain compensation arrangements) may not be covered under Xerox Holdings' and our directors' and officers' insurance coverage. Xerox Holdings and we also indemnify certain fiduciaries of our employee benefit plans for liabilities incurred in their service as fiduciary whether or not they are officers of Xerox Holdings or the Company. Finally, in connection with Xerox Holdings and/or our acquisition of businesses, we may become contractually obligated to indemnify certain former and current directors, officers and employees of those businesses in accordance with pre-acquisition by-laws and/or indemnification agreements and/or applicable state law.

Product Warranty Liabilities

In connection with our normal sales of equipment, including those under sales-type leases, we generally do not issue product warranties. Our arrangements typically involve a separate full service maintenance agreement with the customer. The agreements generally extend over a period equivalent to the lease term or the expected useful life of the equipment under a cash sale. The service agreements involve the payment of fees in return for our performance of repairs and maintenance. As a consequence, we do not have any significant product warranty obligations, including any obligations under customer satisfaction programs. In a few circumstances, particularly in certain cash sales, we may issue a limited product warranty if negotiated by the customer. We also issue warranties for certain of our entry level products, where full service maintenance agreements are not available. In these instances, we record warranty obligations at the time of the sale. Aggregate product warranty liability expenses for the three years ended December 31, 2019, 2018 and 2017 were $12, $14 and $15, respectively. Total product warranty liabilities as of December 31, 2019 and 2018 were $7 and $6, respectively.

Guarantees

We have issued or provided approximately $348 of guarantees as of December 31, 2019 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 (see Brazil Contingencies); and iii) support certain contracts, primarily with public sector customers, which require us to provide a surety bond as a guarantee of our performance of contractual obligations.

In general, we would only be liable for the amount of these guarantees in the event we defaulted in performing our obligations under each contract; the probability of which we believe is remote. We believe that our capacity in the surety markets as well as under various credit arrangements (including our Credit Facility) is sufficient to allow us to respond to future requests for proposals that require such credit support.

Adoption of New Leasing Standard - Lessee

12 Months Ended

Dec. 31, 2019

Adoption of New Leasing Standard - Lessee

Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Standards and Accounting Changes for additional information related to the adoption of ASU 2016-02, Leases (ASC Topic 842).

Lessee Accounting Policies:

We determine at inception whether an arrangement is a lease. Our leases do not include assets of a specialized nature, or the transfer of ownership at the end of the lease, and the exercise of end-of-lease purchase options, which are primarily in our equipment leases, is not reasonably assured at lease inception. Accordingly, the two primary criteria we use to classify transactions as operating or finance leases are: (i) a review of the lease term to determine if it is equal to or greater than 75% of the economic life of the asset, and (ii) a review of the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the asset at the inception of the lease. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We also assess arrangements for goods or services to determine if the arrangement contains a lease at its inception. This assessment first considers whether there is an implicitly or explicitly identified asset in the arrangement and then whether there is a right to control the use of the asset. If there is an embedded lease within a contract, the Company determines the classification of the lease at the lease inception date consistent with standalone leases of assets.

Operating leases are included in Other long-term assets, Accrued expenses and other current liabilities, and Other long-term liabilities in our Consolidated Balance Sheets. Finance leases are included in Land, buildings and equipment, net, Accrued expenses and other current liabilities, and Other long-term liabilities in our Consolidated Balance Sheets.

Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for almost all of our leases is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that we would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. The rate is dependent on several factors, including the lease term and currency of the lease payments.

Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as we do not have reasonable certainty at lease inception that these options will be exercised. We generally consider the economic life of our operating lease ROU assets to be comparable to the useful life of similar owned assets. We have elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Our leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives.

Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. These components are accounted for separately for vehicle and equipment leases. We account for the lease and non-lease components as a single lease component for real estate leases of offices and warehouses.

We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets. We review the recoverability of our long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. We have elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows.

Lessee Summary:

Operating Leases

We have operating leases for real estate and vehicles in our domestic and international operations and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms of up to eleven years and a variety of renewal and/or termination options.

The components of lease expense are as follows:



	Year Ended December 31, 2019
Operating lease expense	$	125
Short-term lease expense	21
Variable lease expense⁽¹⁾	48
Sublease income	(1		)
Total Lease expense	$	193

_____________


(1)	Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as well as taxes and insurance.

As of December 31, 2019, we had no additional operating leases that had not yet commenced.

Operating leases ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows:



	December 31, 2019
Other long-term assets	$	319

Accrued expenses and other current liabilities	$	87
Other long-term liabilities	260
Total Operating lease liabilities	$	347

Supplemental information related to operating leases is as follows:



	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows	$	126
Right-of-use assets obtained in exchange for new lease liabilities ⁽¹⁾	75
Weighted-average remaining lease term	4 years
Weighted-average discount rate	5.47		%

_____________


(1)	Includes the impact of new leases as well as remeasurements and modifications to existing leases.

Maturities and additional information related to operating lease liabilities are as follows:



	December 31, 2019
2020	$	109
2021	87
2022	73
2023	56
2024	24
Thereafter	45
Total Lease payments	394
Less: Imputed interest	47
Total Operating lease liabilities	$	347

Finance Leases

Xerox has one finance lease for equipment and related infrastructure within an outsourced warehouse supply arrangement in the U.S. The lease expires in December 2023 and has a remaining lease obligation of $7 as of December 31, 2019 based on a discount rate of 4.07%. The Right-of-use asset balance associated with this finance lease of $7 is included in Land, buildings and equipment, net in the Consolidated Balance Sheet.

Prior Period Disclosures under ASC 840

For the years ended December 31, 2018 and 2017, operating lease expense, net of sublease income, was $147 and $161, respectively.

Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows:



	December 31, 2018
2019	$	114
2020	88
2021	64
2022	50
2023	36
Thereafter	27
Total Operating lease commitments	$	379

Adoption of New Leasing Standard - Lessee

Lessee Accounting Policies:

Lessee Summary:

Operating Leases

The components of lease expense are as follows:



	Year Ended December 31, 2019
Operating lease expense	$	125
Short-term lease expense	21
Variable lease expense⁽¹⁾	48
Sublease income	(1		)
Total Lease expense	$	193

_____________


(1)	Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as well as taxes and insurance.

As of December 31, 2019, we had no additional operating leases that had not yet commenced.

Operating leases ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows:



	December 31, 2019
Other long-term assets	$	319

Accrued expenses and other current liabilities	$	87
Other long-term liabilities	260
Total Operating lease liabilities	$	347

Supplemental information related to operating leases is as follows:



	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows	$	126
Right-of-use assets obtained in exchange for new lease liabilities ⁽¹⁾	75
Weighted-average remaining lease term	4 years
Weighted-average discount rate	5.47		%

_____________


(1)	Includes the impact of new leases as well as remeasurements and modifications to existing leases.

Maturities and additional information related to operating lease liabilities are as follows:



	December 31, 2019
2020	$	109
2021	87
2022	73
2023	56
2024	24
Thereafter	45
Total Lease payments	394
Less: Imputed interest	47
Total Operating lease liabilities	$	347

Finance Leases

Prior Period Disclosures under ASC 840

For the years ended December 31, 2018 and 2017, operating lease expense, net of sublease income, was $147 and $161, respectively.

Future minimum operating lease commitments that had initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows:



	December 31, 2018
2019	$	114
2020	88
2021	64
2022	50
2023	36
Thereafter	27
Total Operating lease commitments	$	379

Fair Value of Financial Assets and Liabilities - Recurring (Details) - Fair Value, Recurring - Significant Other Observable Inputs (Level 2) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Assets:
Total	$ 22	$ 31
Liabilities:
Total	26	20
Options Held
Assets:
Foreign currency options	0	1
Foreign exchange contracts – forwards
Assets:
Total	2	14
Liabilities:
Total	8	1
Interest rate swaps
Assets:
Total	1	0
Liabilities:
Total	0	3
Deferred compensation
Assets:
Total	19	16
Liabilities:
Total	$ 18	$ 16

Revenue

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue

Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows:



	Year Ended December 31,
	2019		2018		2017
Primary geographical markets⁽¹⁾
United States	$	5,429	$	5,610	$	5,790
Europe	2,326		2,625		2,697
Canada	518		569		648
Other	793		858		856
Total Revenues	$	9,066	$	9,662	$	9,991

Major product and services lines
Equipment⁽²⁾	$	2,062	$	2,178	$	2,152
Supplies, paper and other sales	1,165		1,276		1,260
Maintenance agreements⁽³⁾	2,372		2,603		2,809
Service arrangements⁽⁴⁾	2,517		2,674		2,722
Rental and other	706		663		754
Financing	244		268		294
Total Revenues⁽⁵⁾	$	9,066	$	9,662	$	9,991

Sales channels:
Direct equipment lease⁽⁶⁾	$	672	$	699	$	718
Distributors & resellers⁽⁷⁾	1,343		1,445		1,502
Customer direct	1,212		1,310		1,192
Total Sales	$	3,227	$	3,454	$	3,412

_____________


(1)	Geographic area data is based upon the location of the subsidiary reporting the revenue.


(2)	For the year ended December 31, 2017, Equipment sale revenues excluded $44 of equipment-related training revenue, which was classified as Services under previous revenue guidance - refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition.


(3)	Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through our channel partners as Xerox Partner Print Services (XPPS).


(4)	Primarily includes revenues from our Managed Services offerings (formerly our Managed Documents Services arrangements). Also includes revenues from embedded operating leases, which were not significant.


(5)	Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Change in Presentation, for additional information.


(6)	Primarily reflects sales through bundled lease arrangements.


(7)	Primarily reflects sales through our two-tier distribution channels.

Contract assets and liabilities: We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time. Our contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advanced billings for maintenance and other services to be performed and were approximately $137 and $116 at December 31, 2019 and 2018, respectively. The majority of the balance at December 31, 2019 will be amortized to revenue over approximately the next 30 months.

Contract Costs: Incremental direct costs of obtaining a contract primarily include sales commissions paid to sales people and agents in connection with the placement of equipment with associated post sale services arrangements. These costs are deferred and amortized on the straight-line basis over the estimated contract term, which is currently estimated to be approximately four years. We pay commensurate sales commissions upon customer renewals, therefore our amortization period is aligned to our initial contract term.



	Year Ended December 31,
	2019		2018
Incremental direct costs of obtaining a contract	$	78	$	84
Amortization of incremental direct costs	88		95

The balance of deferred incremental direct costs net of accumulated amortization at December 31, 2019 and 2018 was $163 and $172, respectively. This amount is expected to be amortized over its estimated period of benefit, which we currently estimate to be approximately four years.

We may also incur costs associated with our services arrangements to generate or enhance resources and assets that will be used to satisfy our future performance obligations included in these arrangements. These costs are considered contract fulfillment costs and are amortized over the contractual service period of the arrangement to cost of services. In addition, we also provide inducements to certain customers in various forms, including contractual credits, which are capitalized and amortized as a reduction of revenue over the term of the contract. Amounts deferred associated with contract fulfillment costs and inducements were $13 and $12 at December 31, 2019 and 2018, respectively, and related amortization was $5 and $5 for the years ended December 31, 2019 and 2018, respectively.

Equipment and software used in the fulfillment of service arrangements and where the Company retains control are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific.

Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Stockholders' Equity Note [Abstract]

Schedule of treasury stock by class

The following provides cumulative information relating to Xerox's previously authorized share repurchase program from its inception through July 31, 2019, the effective date of the Reorganization (shares in thousands):



Authorized share repurchase program	$	2,000
Share repurchase cost	$	1,000
Share repurchase fees	$	1
Number of shares repurchased	35,339

The following provides cumulative information relating to Xerox Holdings' share repurchase program from its inception on July 31, 2019 through December 31, 2019 (shares in thousands):



Authorized share repurchase program	$	1,000
Share repurchase cost	$	300
Share repurchase fees	$	—
Number of shares repurchased	9,097

Schedule of common and treasury stock changes

The following table reflects the changes in Common and Treasury stock shares (shares in thousands). The Treasury stock repurchases in the table below include the repurchases under both the prior Xerox authorized share repurchase program and the current Xerox Holdings authorized share repurchase program.



	Common Stock Shares		Treasury Stock Shares
Balance at December 31, 2016	253,594		—
Stock based compensation plans, net	1,019		—
Balance at December 31, 2017	254,613		—
Stock based compensation plans, net	1,103		—
Acquisition of Treasury stock	—		26,093
Cancellation of Treasury stock	(24,026	)	(24,026	)
Balance at December 31, 2018	231,690		2,067
Stock based compensation plans, net	1,310		—
Acquisition of Treasury stock	—		18,343
Cancellation of Treasury stock	(18,379	)	(18,379	)
Balance at December 31, 2019	214,621		2,031

Investment in Affiliates, at Equity - Other Transactions with Fuji Xerox (Details) - Fuji Xerox - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Schedule of Equity Method Investments [Line Items]
Royalty revenue earned	$ 99	$ 96	$ 103
Inventory purchases from Fuji Xerox	1,337	1,501	1,585
Inventory sales to Fuji Xerox	33	43	58
R&D payments received from Fuji Xerox	0	1	1
R&D payments paid to Fuji Xerox	4	8	$ 14
Net amounts due to Fuji Xerox	$ 353	$ 320

Finance Receivables, Net (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of financing receivables, minimum payments

Finance receivables

Finance receivables, net were as follows:



	December 31,
	2019			2018
Gross receivables	$	3,865		$	4,003
Unearned income	(425		)	(439		)
Subtotal	3,440			3,564
Residual values	—			—
Allowance for doubtful accounts	(89		)	(92		)
Finance Receivables, Net	3,351			3,472
Less: Billed portion of finance receivables, net	111			105
Less: Current portion of finance receivables not billed, net	1,158			1,218
Finance Receivables Due After One Year, Net	$	2,082		$	2,149

A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as follows:



	December 31,
	2019		2018
12 Months⁽¹⁾	$	1,490	$	1,543
24 Months	1,052		1,108
36 Months	728		755
48 Months	422		425
60 Months	158		158
Thereafter	15		14
Total	$	3,865	$	4,003

_____________

(1)

Includes amounts previously billed of $115 and $107 as of December 31, 2019 and 2018, respectively.

Allowance for credit losses, financing receivables

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



Allowance for Credit Losses:	United States			Canada			Europe			Other⁽¹⁾		Total
Balance at December 31, 2017	$	56		$	15		$	35		$	2	$	108
Provision	12			3			9			—		24
Charge-offs	(17		)	(6		)	(18		)	—		(41		)
Recoveries and other⁽²⁾	2			—			(1		)	—		1
Balance at December 31, 2018	$	53		$	12		$	25		$	2	$	92
Provision	20			1			7			—		28
Charge-offs	(15		)	(5		)	(14		)	—		(34		)
Recoveries and other⁽²⁾	1			2			—			—		3
Balance at December 31, 2019	$	59		$	10		$	18		$	2	$	89
Finance Receivables Collectively Evaluated for Impairment:
December 31, 2018⁽³⁾⁽⁴⁾	$	1,946		$	335		$	1,239		$	44	$	3,564
December 31, 2019⁽³⁾	$	1,922		$	320		$	1,155		$	43	$	3,440

_____________


(1)	Includes developing market countries and smaller units.


(2)	Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.


(3)	Total Finance receivables exclude the allowance for credit losses of $89 and $92 at December 31, 2019 and 2018, respectively.

(4)

As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation.

Credit quality indicators for financing receivables

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



	December 31, 2019								December 31, 2018
	Investment Grade		Non-investment Grade		Sub-standard		Total Finance Receivables		Investment Grade		Non-investment Grade		Sub-standard		Total Finance Receivables
Direct	$	640	$	331	$	132	$	1,103	$	785	$	348	$	104	$	1,237
Indirect	258		445		116		819		162		400		147		709
Total United States⁽¹⁾	898		776		248		1,922		947		748		251		1,946
Total Canada	163		91		66		320		162		99		74		335
France	206		137		24		367		232		157		29		418
U.K/Ireland	154		79		8		241		150		87		7		244
Central⁽²⁾	176		113		9		298		196		123		8		327
Southern⁽³⁾	65		125		15		205		52		136		17		205
Nordic⁽⁴⁾	23		19		2		44		28		15		2		45
Total Europe⁽⁵⁾	624		473		58		1,155		658		518		63		1,239
Other	31		12		—		43		31		13		—		44
Total	$	1,716	$	1,352	$	372	$	3,440	$	1,798	$	1,378	$	388	$	3,564

_____________


(1)	As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation.


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


(3)	Italy, Greece, Spain and Portugal.


(4)	Sweden, Norway, Denmark and Finland.

(5)

Prior year amounts have been recasted to conform to the current year presentation.

Aging of billed finance receivables

The aging of our billed finance receivables is as follows:



	December 31, 2019
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	37	$	11	$	8	$	56	$	1,047	$	1,103	$	57
Indirect	25		5		3		33		786		819		—
Total United States	62		16		11		89		1,833		1,922		57
Canada	8		1		1		10		310		320		17
France	3		—		—		3		364		367		15
U.K./Ireland	2		—		—		2		239		241		—
Central⁽¹⁾	2		—		1		3		295		298		13
Southern⁽²⁾	3		1		1		5		200		205		4
Nordic⁽³⁾	—		—		—		—		44		44		—
Total Europe	10		1		2		13		1,142		1,155		32
Other	2		1		—		3		40		43		—
Total	$	82	$	19	$	14	$	115	$	3,325	$	3,440	$	106



	December 31, 2018
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	38	$	11	$	7	$	56	$	1,181	$	1,237	$	54
Indirect	18		4		2		24		685		709		—
Total United States	56		15		9		80		1,866		1,946		54
Canada	7		2		1		10		325		335		22
France	5		—		—		5		413		418		14
U.K./Ireland	2		—		—		2		242		244		—
Central⁽¹⁾	1		1		1		3		324		327		6
Southern⁽²⁾	3		1		1		5		200		205		6
Nordic⁽³⁾	—		—		—		—		45		45		—
Total Europe	11		2		2		15		1,224		1,239		26
Other	2		—		—		2		42		44		—
Total	$	76	$	19	$	12	$	107	$	3,457	$	3,564	$	102

_____________


(1)	As a result of an internal reorganization, XBS amounts, previously classified as Other, were reclassified to the U.S. in first quarter 2019. Prior year amounts have also been reclassified to conform to the current year presentation.


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


(3)	Italy, Greece, Spain and Portugal.

(4)

Sweden, Norway, Denmark and Finland.

Shareholders' Equity - Equity Stocks Information (Details) - $ / shares shares in Millions	Dec. 31, 2019	Aug. 01, 2019
Class of Stock [Line Items]
Preferred stock, shares authorized (shares)	22.0
Preferred stock, par value (dollars per share)	$ 1.00
Common stock, authorized (shares)	437.5
Par value of common stock (dollars per share)		$ 1
Share-based Payment Arrangement
Class of Stock [Line Items]
Common stock, capital shares reserved for future issuance (shares)	15.0
Series A
Class of Stock [Line Items]
Common stock, capital shares reserved for future issuance (shares)	7.0

Preferred Stock	12 Months Ended
Preferred Stock	Dec. 31, 2019
Equity [Abstract]
Preferred Stock	Preferred Stock Corporate Reorganization As disclosed in Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, on July 31, 2019, Xerox completed the Reorganization, pursuant to which Xerox became a direct, wholly-owned subsidiary of Xerox Holdings. In conjunction with the reorganization, the individual holder of the shares of Xerox’s Series B Convertible Perpetual Preferred Stock (Series B Preferred Stock) exchanged those shares for the same number of shares of Xerox Holdings Series A Convertible Perpetual Preferred Voting Stock (Series A Preferred Stock). Each share of Xerox Holdings Series A Preferred Stock has the same designations, rights, powers and preferences, and the same qualifications, limitations and restrictions as the shares of Xerox Series B Preferred Stock, with the addition of certain voting rights. Subsequent to the Reorganization, Xerox Holdings contributed the Xerox Series B Preferred Stock it held to Xerox in exchange for additional capital and Xerox subsequently extinguished the Series B Preferred Stock. The contribution and extinguishment were recorded at carrying value and as a result of this subsequent exchange, Xerox has no Preferred Stock outstanding at December 31, 2019. Series A Convertible Perpetual Voting Preferred Stock As of December 31, 2019, Xerox Holdings had one class of preferred stock outstanding. Xerox Holdings has issued 180,000 shares of Series A Preferred Stock that have an aggregate liquidation value of $180 and a carrying value of $214. The Series A Preferred Stock pays quarterly cash dividends at a rate of 8% per year ($14 per year), on a cumulative basis. Each share of Series A Preferred Stock is convertible at any time, at the option of the holder, into 37.4532 shares of common stock for a total of 6,742 thousand shares (reflecting an initial conversion price of approximately $26.70 per share of common stock), subject to customary anti-dilution adjustments. If the closing price of Xerox Holdings common stock exceeds $39.00 or 146.1% of the initial conversion price of $26.70 per share of common stock for 20 out of 30 consecutive trading days, Xerox Holdings will have the right to cause any or all of the Series A Preferred Stock to be converted into shares of common stock at the then applicable conversion rate. The Series A Preferred Stock is also convertible, at the option of the holder, upon a change in control, at the applicable conversion rate plus an additional number of shares determined by reference to the price paid for our common stock upon such change in control. In addition, upon the occurrence of certain fundamental change events, including a change in control or the delisting of Xerox Holdings's common stock, the holder of the Series A Preferred Stock has the right to require us to redeem any or all of the preferred stock in cash at a redemption price per share equal to the liquidation preference and any accrued and unpaid dividends up to, but not including, the redemption date. The Series A Preferred Stock is classified as temporary equity (i.e., apart from permanent equity) as a result of the contingent redemption feature. Series A Preferred Stock Voting Rights - The Xerox Holdings Series A Preferred Stock will vote together with the Xerox Holdings common stock, as a single class, on all matters submitted to the shareholders of Xerox Holdings, but the Xerox Holdings Series A Voting Preferred Stock will only be entitled to one vote for every ten shares of Xerox Holdings common stock into which the Holdings Series A Preferred Stock is convertible (674,157 at December 31, 2019).

Financial Instruments - Summary of Derivative Instruments Fair Value (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative (Liability) Asset	$ (5)	$ 11
Other Assets
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Derivative instruments - assets	3	15
Other Liabilities
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Derivative instruments - liabilities	(8)	(4)
Derivatives Designated as Hedging Instruments \| Other Assets
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative (Liability) Asset	(3)
Derivatives Designated as Hedging Instruments \| Other Liabilities
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative (Liability) Asset		5
Foreign exchange contracts – forwards \| Derivatives Designated as Hedging Instruments
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative (Liability) Asset	(4)	8
Foreign exchange contracts – forwards \| Derivatives Designated as Hedging Instruments \| Other current assets
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Derivative instruments - assets	1	7
Foreign exchange contracts – forwards \| Derivatives Designated as Hedging Instruments \| Accrued expensed and other current liabilities
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Derivative instruments - liabilities	(5)	0
Foreign exchange contracts – forwards \| Derivatives NOT Designated as Hedging Instruments \| Other current assets
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Derivative instruments - assets	1	7
Foreign exchange contracts – forwards \| Derivatives NOT Designated as Hedging Instruments \| Accrued expensed and other current liabilities
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Derivative instruments - liabilities	(3)	(1)
Foreign exchange contracts – forwards \| Derivatives NOT Designated as Hedging Instruments \| Other Assets
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative (Liability) Asset	(2)
Foreign exchange contracts – forwards \| Derivatives NOT Designated as Hedging Instruments \| Other Liabilities
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Net Derivative (Liability) Asset		6
Foreign currency options \| Derivatives Designated as Hedging Instruments \| Other current assets
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Derivative instruments - assets	0	1
Interest rate swaps \| Derivatives Designated as Hedging Instruments \| Other long-term assets
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Derivative instruments - assets	1	0
Interest rate swaps \| Derivatives Designated as Hedging Instruments \| Other long-term liabilities
Summary Of Derivative Instruments By Hedge Designation [Abstract]
Derivative instruments - liabilities	$ 0	$ 3

Subsequent Events (Details) - Subsequent Event £ in Millions		1 Months Ended
	Jan. 05, 2020 USD ($)	Jan. 31, 2020 USD ($)	Jan. 31, 2020 GBP (£)	Jan. 06, 2020 USD ($)
Fuji Xerox
Subsequent Event [Line Items]
Period of trademark use after termination (years)	2 years
Royalty receivable	$ 100,000,000
HP Inc. \| Citigroup Global Markets Inc., Mizuho Bank, Ltd. And Bank Of America, N.A. (The Commitment Parties) \| Bridge Loan
Subsequent Event [Line Items]
Amount committed by lender				$ 24,000,000,000
Contingent fees	140,000,000
HP Inc. \| Citigroup Global Markets Inc., Mizuho Bank, Ltd. And Bank Of America, N.A. (The Commitment Parties) \| Senior Unsecured 364-Day Term Loan Bridge Facility \| Bridge Loan
Subsequent Event [Line Items]
Amount committed by lender	$ 19,500,000,000
Debt, term (days)	364 days
HP Inc. \| Citigroup Global Markets Inc., Mizuho Bank, Ltd. And Bank Of America, N.A. (The Commitment Parties) \| Senior Unsecured 60-Day Term Loan Bridge Facility \| Bridge Loan
Subsequent Event [Line Items]
Amount committed by lender	$ 4,500,000,000
Debt, term (days)	60 days
Arena Group
Subsequent Event [Line Items]
Consideration transferred		$ 46,000,000	£ 35

Stock-Based Compensation - Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($) trading_day shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($)
Stock-Based Compensation Details [Line Items]
Number of shares available for grant (shares) \| shares	13,000,000	14,000,000
Stock-based compensation expense, pre-tax \| $	$ 50	$ 57	$ 52
Income tax benefit recognized in earnings \| $	$ 13	$ 14	$ 20
Restricted Stock Units (RSUs)
Stock-Based Compensation Details [Line Items]
Term (years)			3 years
Restricted Stock Units (RSUs) \| Graded vesting after year one of service period
Stock-Based Compensation Details [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting rights (percent)	25.00%
Term (years)	1 year
Restricted Stock Units (RSUs) \| Graded vesting after year two of service period
Stock-Based Compensation Details [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting rights (percent)	25.00%
Term (years)	1 year
Restricted Stock Units (RSUs) \| Graded vesting after year three of service period
Stock-Based Compensation Details [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting rights (percent)	50.00%
Term (years)	3 years
Performance Shares
Stock-Based Compensation Details [Line Items]
Term (years)	3 years	3 years	3 years
Measurement period for inputs (years)	3 years
Performance Shares \| Revenue
Stock-Based Compensation Details [Line Items]
Weighting of measurement components (percent)	25.00%
Performance Shares \| Free Cash Flow
Stock-Based Compensation Details [Line Items]
Weighting of measurement components (percent)	25.00%
Performance Shares \| Absolute Share Price
Stock-Based Compensation Details [Line Items]
Weighting of measurement components (percent)	50.00%
Performance Shares \| Performance-Based
Stock-Based Compensation Details [Line Items]
Weighting of measurement components (percent)	50.00%
Performance share grant basis - performance \| shares		0.6666666667
Performance share maximum overachievement	100.00%
Performance-based metric performance period (years)	1 year
Time-based metric performance period (years)	2 years
Performance Shares \| Performance Based - Actual Results
Stock-Based Compensation Details [Line Items]
Performance-based metric performance period (years)	3 years
Performance Shares \| Market-Based (ASP)
Stock-Based Compensation Details [Line Items]
Weighting of measurement components (percent)	50.00%
Performance Shares \| TSR
Stock-Based Compensation Details [Line Items]
Term (years)	3 years	3 years
Performance share grant basis - TSR \| shares		0.3333333333
Total number of trading days of performance period \| trading_day	20
Performance-based metric performance period (years)	1 year
Time-based metric performance period (years)	2 years
Impact to compensation expense resulting from award modification \| $	$ 0
Performance Shares \| Minimum
Stock-Based Compensation Details [Line Items]
Performance shares entitlement of original award grant (percent)	0.00%	0.00%
Performance Shares \| Maximum
Stock-Based Compensation Details [Line Items]
Performance shares entitlement of original award grant (percent)	200.00%	200.00%
Equity Option \| Graded vesting after year one of service period
Stock-Based Compensation Details [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting rights (percent)	25.00%
Equity Option \| Graded vesting after year two of service period
Stock-Based Compensation Details [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting rights (percent)	25.00%
Equity Option \| Graded vesting after year three of service period
Stock-Based Compensation Details [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting rights (percent)	50.00%
Options outstanding, term (years)	10 years

Income and Other Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of income before income tax, domestic and foreign

Income before income taxes and equity income (pre-tax income) from continuing operations was as follows:



	Year Ended December 31,
	2019		2018		2017
Domestic income	$	679	$	331	$	354
Foreign income	143		218		171
Income before Income Taxes and Equity Income	$	822	$	549	$	525

Schedule of components of income tax expense (benefit)

We recorded the following charges (credits) to Income tax expense associated with the Tax Act:



	Year Ended December 31,
	2019			2018		2017		Total
Tax Act Impacts	$	(35	)	$	89	$	400	$	454

Income tax expense from continuing operations were as follows:



	Year Ended December 31,
	2019			2018			2017
Federal Income Taxes
Current	$	(3	)	$	37		$	(12	)
Deferred	98			83			411
Foreign Income Taxes
Current	43			46			62
Deferred	5			57			(21		)
State Income Taxes
Current	15			29			19
Deferred	21			(5		)	9
Income Tax Expense	$	179		$	247		$	468

Schedule of effective income tax rate reconciliation

A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate was as follows:



	Year Ended December 31,
	2019		2018		2017
U.S. federal statutory income tax rate	21.0	%	21.0	%	35.0	%
Nondeductible expenses	1.3	%	3.7	%	1.3	%
Effect of tax law changes	(4.6	)%	14.5	%	76.2	%
Change in valuation allowance for deferred tax assets	2.0	%	0.6	%	1.1	%
State taxes, net of federal benefit	3.5	%	2.3	%	3.6	%
Audit and other tax return adjustments	0.6	%	(1.8	)%	(9.4	)%
Tax-exempt income, credits and incentives	(2.1	)%	(2.2	)%	(3.2	)%
Foreign rate differential adjusted for U.S. taxation of foreign profits⁽¹⁾	0.1	%	4.8	%	(16.5	)%
Other	—	%	2.1	%	1.0	%
Effective Income Tax Rate	21.8	%	45.0	%	89.1	%

_____________

(1)

The “U.S. taxation of foreign profits” represents the U.S. tax, net of foreign tax credits, associated with actual and deemed repatriations of earnings from our non-U.S. subsidiaries.

Schedule of allocation of income tax expense (benefit)

Total income tax expense (benefit) was allocated to the following items:



	Year Ended December 31,
	2019			2018			2017
Pre-tax income	$	179		$	247		$	468
Discontinued operations⁽¹⁾	95			10			1
Common shareholders' equity:
Changes in defined benefit plans	(55		)	131			63
Cash flow hedges	(1		)	5			5
Translation adjustments	8			(9		)	1
Retained Earnings	—			36			—
Total Income Tax Expense	$	226		$	420		$	538

_____________

(1)

Refer to Note 7 - Divestitures for additional information regarding discontinued operations.

Schedule of unrecognized tax benefits rollforward

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	2019			2018			2017
Balance at January 1	$	108		$	125		$	165
Additions related to current year	42			2			1
Additions related to prior years positions	17			3			10
Reductions related to prior years positions	(36		)	(13		)	(46		)
Settlements with taxing authorities⁽¹⁾	(1		)	(6		)	(5		)
Reductions related to lapse of statute of limitations	(3		)	(3		)	(3		)
Currency	—			—			3
Balance at December 31	$	127		$	108		$	125

_____________

(1)

The majority of settlements did not result in the utilization of cash.

Schedule of deferred tax assets and liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows:



	December 31,
	2019			2018
Deferred Tax Assets
Research and development	$	143		$	252
Post-retirement medical benefits	98			99
Net operating losses	389			389
Operating reserves, accruals and deferrals	95			138
Tax credit carryforwards	239			254
Deferred and share-based compensation	26			32
Pension	298			266
Depreciation	9			90
Operating lease liabilities	347			—
Other	62			46
Subtotal	1,706			1,566
Valuation allowance	(399		)	(397		)
Total	$	1,307		$	1,169

Deferred Tax Liabilities
Finance lease and installment sales	$	243		$	291
Intangibles and goodwill	128			129
Unremitted earnings of foreign subsidiaries	39			59
Operating lease ROU assets	319			—
Other	17			1
Total	$	746		$	480

Total Deferred Taxes, Net	$	561		$	689

Reconciliation to the Consolidated Balance Sheets
Deferred tax assets	$	598		$	740
Deferred tax liabilities⁽¹⁾	(37		)	(51		)
Total Deferred Taxes, Net	$	561		$	689

_____________

(1)

Represents the deferred tax liabilities recorded in Other long-term liabilities - refer to Note 15 - Supplementary Financial Information.

Income and Other Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income and Other Taxes

Income before income taxes and equity income (pre-tax income) from continuing operations was as follows:



	Year Ended December 31,
	2019		2018		2017
Domestic income	$	679	$	331	$	354
Foreign income	143		218		171
Income before Income Taxes and Equity Income	$	822	$	549	$	525

The components of Income tax expense from continuing operations were as follows:



	Year Ended December 31,
	2019			2018			2017
Federal Income Taxes
Current	$	(3	)	$	37		$	(12	)
Deferred	98			83			411
Foreign Income Taxes
Current	43			46			62
Deferred	5			57			(21		)
State Income Taxes
Current	15			29			19
Deferred	21			(5		)	9
Income Tax Expense	$	179		$	247		$	468

A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate was as follows:



	Year Ended December 31,
	2019		2018		2017
U.S. federal statutory income tax rate	21.0	%	21.0	%	35.0	%
Nondeductible expenses	1.3	%	3.7	%	1.3	%
Effect of tax law changes	(4.6	)%	14.5	%	76.2	%
Change in valuation allowance for deferred tax assets	2.0	%	0.6	%	1.1	%
State taxes, net of federal benefit	3.5	%	2.3	%	3.6	%
Audit and other tax return adjustments	0.6	%	(1.8	)%	(9.4	)%
Tax-exempt income, credits and incentives	(2.1	)%	(2.2	)%	(3.2	)%
Foreign rate differential adjusted for U.S. taxation of foreign profits⁽¹⁾	0.1	%	4.8	%	(16.5	)%
Other	—	%	2.1	%	1.0	%
Effective Income Tax Rate	21.8	%	45.0	%	89.1	%

_____________


(1)	The “U.S. taxation of foreign profits” represents the U.S. tax, net of foreign tax credits, associated with actual and deemed repatriations of earnings from our non-U.S. subsidiaries.

On a consolidated basis, including discontinued operations, we paid a total of $94, $80 and $84 in income taxes to federal, foreign and state jurisdictions during the three years ended December 31, 2019, 2018 and 2017, respectively.

Total income tax expense (benefit) was allocated to the following items:



	Year Ended December 31,
	2019			2018			2017
Pre-tax income	$	179		$	247		$	468
Discontinued operations⁽¹⁾	95			10			1
Common shareholders' equity:
Changes in defined benefit plans	(55		)	131			63
Cash flow hedges	(1		)	5			5
Translation adjustments	8			(9		)	1
Retained Earnings	—			36			—
Total Income Tax Expense	$	226		$	420		$	538

_____________


(1)	Refer to Note 7 - Divestitures for additional information regarding discontinued operations.

Unrecognized Tax Benefits and Audit Resolutions

We recognize tax liabilities when, despite our belief that our tax return positions are supportable, we believe that certain positions may not be fully sustained upon review by tax authorities. Each period, we assess uncertain tax positions for recognition, measurement and effective settlement. Benefits from uncertain tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement - the more-likely-than-not recognition threshold. Where we have determined that our tax return filing position does not satisfy the more likely than not recognition threshold, we have recorded no tax benefits.

We are also subject to ongoing tax examinations in numerous jurisdictions due to the extensive geographical scope of our operations. Our ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can increase or decrease our effective tax rate, as well as impact our operating results. The specific timing of when the resolution of each tax position will be reached is uncertain. As of December 31, 2019, we do not believe that there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	2019			2018			2017
Balance at January 1	$	108		$	125		$	165
Additions related to current year	42			2			1
Additions related to prior years positions	17			3			10
Reductions related to prior years positions	(36		)	(13		)	(46		)
Settlements with taxing authorities⁽¹⁾	(1		)	(6		)	(5		)
Reductions related to lapse of statute of limitations	(3		)	(3		)	(3		)
Currency	—			—			3
Balance at December 31	$	127		$	108		$	125

_____________


(1)	The majority of settlements did not result in the utilization of cash.

Included in the balances at December 31, 2019, 2018 and 2017 are $3, $8 and $8, respectively, of tax positions that are highly certain of realizability but for which there is uncertainty about the timing or that they may be reduced through an indirect benefit from other taxing jurisdictions. Because of the impact of deferred tax accounting, other than for the possible incurrence of interest and penalties, the disallowance of these positions would not affect the annual effective tax rate.

Within income tax expense, we recognize interest and penalties accrued on unrecognized tax benefits, as well as interest received from favorable settlements. We had $2, $2 and $5 accrued for the payment of interest and penalties associated with unrecognized tax benefits at December 31, 2019, 2018 and 2017, respectively.

In the U.S., we are no longer subject to U.S. federal income tax examinations for years before 2015. With respect to our major foreign jurisdictions, we are no longer subject to tax examinations by tax authorities for years before 2011.

Tax Cuts and Jobs Act (the Tax Act)

On December 22, 2017, the Tax Cuts and Jobs Act (the Tax Act) was enacted. The Tax Act significantly revised the U.S. corporate income tax system by, among other things, lowering the U.S. statutory corporate income tax rate from 35% to 21% and implementing a territorial tax system that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries.

We recorded the following charges (credits) to Income tax expense associated with the Tax Act:



	Year Ended December 31,
	2019			2018		2017		Total
Tax Act Impacts	$	(35	)	$	89	$	400	$	454

The net charge of $454 included the following components:

Foreign tax effects: The deemed repatriation tax associated with the Tax Act was $164 and was based on total post-1986 earnings and profits (E&P) that had previously been deferred from U.S. income taxes. We utilized our existing foreign tax credit carryforwards to settle this deemed repatriation tax. Our net charge for the Tax Act also included a charge of $99 for other tax liabilities and adjustments resulting from our actual and anticipated distributions of our net accumulated foreign E&P. As a consequence of the Tax Act, we now no longer consider our post 1986 E&P indefinitely reinvested.

Deferred tax assets and liabilities: Our net charge includes a $191 charge for the remeasurement of certain deferred tax assets and liabilities based on the new statutory income tax rate of 25%, inclusive of estimated state taxes.

Deferred Income Taxes

At December 31, 2019 we have not provided deferred taxes on our undistributed pre-1987 E&P of approximately $350, as such undistributed earnings have been determined to be indefinitely reinvested and we currently do not plan to initiate any action that would precipitate a deferred tax impact. The decrease from the amount at December 31, 2018 of $1.5 billion is due to our sale of Fuji Xerox in November 2019 – refer to Note 7 – Divestitures for additional information regarding this sale. Additionally, we have also not provided deferred taxes on the outside basis differences in our investments in foreign subsidiaries that are unrelated to undistributed earnings. These basis differences are also indefinitely reinvested. A determination of the unrecognized deferred taxes related to these components is not practicable.

The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows:



	December 31,
	2019			2018
Deferred Tax Assets
Research and development	$	143		$	252
Post-retirement medical benefits	98			99
Net operating losses	389			389
Operating reserves, accruals and deferrals	95			138
Tax credit carryforwards	239			254
Deferred and share-based compensation	26			32
Pension	298			266
Depreciation	9			90
Operating lease liabilities	347			—
Other	62			46
Subtotal	1,706			1,566
Valuation allowance	(399		)	(397		)
Total	$	1,307		$	1,169

Deferred Tax Liabilities
Finance lease and installment sales	$	243		$	291
Intangibles and goodwill	128			129
Unremitted earnings of foreign subsidiaries	39			59
Operating lease ROU assets	319			—
Other	17			1
Total	$	746		$	480

Total Deferred Taxes, Net	$	561		$	689

Reconciliation to the Consolidated Balance Sheets
Deferred tax assets	$	598		$	740
Deferred tax liabilities⁽¹⁾	(37		)	(51		)
Total Deferred Taxes, Net	$	561		$	689

_____________


(1)	Represents the deferred tax liabilities recorded in Other long-term liabilities - refer to Note 15 - Supplementary Financial Information.

We record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and the amounts reported, as well as net operating loss and tax credit carryforwards. Deferred tax assets are assessed for realizability and, where applicable, a valuation allowance is recorded to reduce the total deferred tax asset to an amount that will, more-likely-than-not, be realized in the future. We apply judgment in assessing the realizability of these deferred tax assets and the need for any valuation allowances. In determining the amount of deferred tax assets that are more-likely-than-not to be realized, we considered historical profitability, projected future taxable income, the expected timing of the reversals of existing temporary difference and tax planning strategies. The deferred tax assets requiring significant judgment are US tax credit carryforwards with a limited life and a foreign net operating loss with an indefinite carryforward period.

The net change in the total valuation allowance for the years ended December 31, 2019, 2018 and 2017 was an increase of $2, a decrease of $38 and an increase of $19, respectively. The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which we have concluded it is more-likely-than-not that these items will not be realized in the ordinary course of operations.

Although realization is not assured, we have concluded that it is more-likely-than-not that the deferred tax assets, for which a valuation allowance was determined to be unnecessary, will be realized in the ordinary course of operations based on the available positive and negative evidence, including scheduling of deferred tax liabilities and projected income from operating activities. The amount of the net deferred tax assets considered realizable, however, could change in the near term if future income or income tax rates are higher or lower than currently estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences.

At December 31, 2019, we had tax credit carryforwards of $239 available to offset future income taxes, of which $1 are available to carryforward indefinitely while the remaining $238 will expire 2020 through 2040 if not utilized. We also had net operating loss carryforwards for income tax purposes of $522 that will expire 2020 through 2040, if not utilized, and $1.7 billion available to offset future taxable income indefinitely.

Restructuring Programs - Restructuring and Related Costs (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($) employee	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Restructuring Cost and Reserve [Line Items]
Related restructuring costs	$ 102
Number of employees transferred \| employee	2,200
Payments for restructuring related costs	$ 65
Restructuring payments	93	$ 169	$ 220
Restructuring related costs	37
Retention Related Severance Bonuses
Restructuring Cost and Reserve [Line Items]
Related restructuring costs	39
Contractual Severance Costs
Restructuring Cost and Reserve [Line Items]
Related restructuring costs	43
Consulting and Other Costs
Restructuring Cost and Reserve [Line Items]
Related restructuring costs	$ 20

Preferred Stock (Details)
$ / shares in Units, $ in Millions

12 Months Ended

Dec. 31, 2019

USD ($)

day

vote

$ / shares

Dec. 31, 2018

USD ($)

Dec. 31, 2017

USD ($)

^[1]

Class of Stock [Line Items]

Preferred stock, carrying value

$ 214

Preferred stock, annual dividend (in dollars)

$ 14

Initial conversion price per share of common stock | $ / shares

$ 26.70

Minimum number of trading days C/S close price must exceed conversion price to trigger Pfd Stock conversion | day

Number of trading days used for measurement | day

Common Stock

Class of Stock [Line Items]

Preferred stock converted into common shares | shares

37.4532

Preferred stock conversion to common stock, shares | shares

6,742,000

Maximum common stock closing price, triggering conversion | $ / shares

$ 39.00

Maximum common stock closing price, percent, triggering conversion

146.10%

Series A

Class of Stock [Line Items]

Preferred stock converted into common shares | shares

180,000

Preferred stock, aggregate liquidation value

$ 180

Preferred stock, carrying value

$ 214

Preferred stock, dividend rate, percentage

8.00%

Preferred stock, annual dividend (in dollars)

$ 14

Number of votes per ten shares | vote

Preferred stock, number of votes if converted | vote

674,157

[1]	Cash dividends declared on preferred stock for 2019, 2018 and 2017 were $20 per share on a quarterly basis and $80 per share on an annual basis.

Consolidated Statements of Shareholders' Equity - USD ($)
$ in Millions

Total

Xerox Holdings Shareholders' Equity

Common Stock

Additional Paid-in Capital

Treasury Stock

Retained Earnings

AOCL

Noncontrolling Interests

Xerox Corporation

Xerox Holdings Shareholders' Equity

Xerox Corporation

Common Stock

Xerox Corporation

Additional Paid-in Capital

Xerox Corporation

Treasury Stock

Xerox Corporation

Retained Earnings

Xerox Corporation

AOCL

^[1]

Xerox Corporation

Noncontrolling Interests

Beginning Balance at Dec. 31, 2016

$ 4,709

$ 254

$ 3,858

$ 0

$ 4,934

$ (4,337)

^[1]

$ 4,709

$ 254

$ 3,858

$ 0

$ 4,934

$ (4,337)

Noncontrolling Interests Beginning Balance at Dec. 31, 2016

$ 38

Total Equity Beginning Balance at Dec. 31, 2016

$ 4,747

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Comprehensive income (loss), net attributable to Xerox Holding/Xerox

784

195

589

^[1]

784

195

589

Comprehensive income (loss), net attributable to noncontrolling interest

Comprehensive income, net

797

Cash dividends declared-common

^[2]

(259)

Cash dividends declared-preferred

^[3]

(14)

Stock option and incentive plans, net

Distributions to noncontrolling interests

(15)

(1)

(14)

(15)

(1)

(14)

Ending Balance at Dec. 31, 2017

5,256

255

3,893

4,856

(3,748)

^[1]

5,256

255

3,893

4,856

(3,748)

Noncontrolling Interests Ending Balance at Dec. 31, 2017

Total Equity Ending Balance at Dec. 31, 2017

$ 5,293

5,293

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Dividends per common share (in dollars per share)

$ 1

Dividends per preferred share (in dollars per share)

$ 80

Cumulative effect of change in accounting principles

$ 120

120

^[4]

120

^[4]

Cumulative effect of change in accounting principles | Accounting Standards Update 2014-09

^[4]

117

Cumulative effect of change in accounting principles | Accounting Standards Update 2016-01

^[4]

Comprehensive income (loss), net attributable to Xerox Holding/Xerox

544

361

183

^[1]

544

361

183

Comprehensive income (loss), net attributable to noncontrolling interest

Comprehensive income, net

557

Cash dividends declared-common

(251)

^[2]

(251)

^[2]

(251)

^[2]

(251)

^[2]

Cash dividends declared-preferred

(14)

^[3]

(14)

^[3]

(14)

^[3]

(14)

^[3]

Stock option and incentive plans, net

Payments to acquire treasury stock, including fees

(700)

Cancellation of treasury stock

(24)

(621)

645

(24)

(621)

645

Distributions to noncontrolling interests

(16)

Ending Balance at Dec. 31, 2018

5,005

232

3,321

(55)

5,072

(3,565)

5,005

232

3,321

(55)

5,072

(3,565)

Noncontrolling Interests Ending Balance at Dec. 31, 2018

Total Equity Ending Balance at Dec. 31, 2018

$ 5,039

5,039

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Dividends per common share (in dollars per share)

$ 1

Dividends per preferred share (in dollars per share)

$ 80

Cumulative effect of change in accounting principles

^[5]

$ 0

127

^[4]

(127)

^[1],[4]

127

^[4]

(127)

^[4]

Comprehensive income (loss), net attributable to Xerox Holding/Xerox

1,399

1,353

^[1]

1,399

1,353

Comprehensive income (loss), net attributable to noncontrolling interest

Comprehensive income, net

1,407

Cash dividends declared-common

(226)

^[2]

(115)

^[2]

Cash dividends declared-preferred

(14)

^[3]

(7)

^[3]

Dividends declared to parent

(183)

^[3]

Transfers (to) from parent

(175)

Stock option and incentive plans, net

Payments to acquire treasury stock, including fees

(600)

(300)

Cancellation of treasury stock

(18)

(561)

579

(11)

(344)

355

Distributions to noncontrolling interests

(3)

Reorganization

225

(221)

446

Divestiture

(32)

^[6]

(32)

^[6]

(32)

^[7]

(32)

^[7]

Ending Balance at Dec. 31, 2019

5,587

$ 5,587

$ 215

$ 2,782

$ (76)

$ 6,312

$ (3,646)

5,867

$ 5,867

$ 0

$ 3,266

$ 0

$ 6,247

$ (3,646)

Noncontrolling Interests Ending Balance at Dec. 31, 2019

$ 7

Total Equity Ending Balance at Dec. 31, 2019

$ 5,594

$ 5,874

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Dividends per common share (in dollars per share)

$ 1.00

Dividends per preferred share (in dollars per share)

$ 80

[1]	AOCL - Accumulated other comprehensive loss.
[2]	Cash dividends declared on common stock for 2019, 2018 and 2017 were $0.25 per share on a quarterly basis and $1.00 per share on an annual basis.
[3]	Cash dividends declared on preferred stock for 2019, 2018 and 2017 were $20 per share on a quarterly basis and $80 per share on an annual basis.
[4]	Includes $117 related to the adoption of the Revenue Recognition Standard ASU 2014-09 - Revenue from Contracts with Customers (ASC Topic 606), see Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, and $3 related to our share of Fuji Xerox's adoption of ASU 2016-01 - Financial Instruments - Classification and Measurement.
[5]	Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Income Taxes for additional information related to the adoption of ASU 2018-02.
[6]	Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 7 - Divestitures for additional information regarding divestitures.
[7]	Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies and Note 7 - Divestitures for additional information regarding divestitures.

Stock-Based Compensation - Payouts (Details) - TSR - Performance Shares	12 Months Ended
	Dec. 31, 2019
$40.00 and above
Stock-Based Compensation Details [Line Items]
Payout (percent of target)	200.00%
$35.00
Stock-Based Compensation Details [Line Items]
Payout (percent of target)	100.00%
$30.00
Stock-Based Compensation Details [Line Items]
Payout (percent of target)	50.00%
Below $30.00
Stock-Based Compensation Details [Line Items]
Payout (percent of target)	0.00%
80th and above
Stock-Based Compensation Details [Line Items]
Payout (percent of target)	200.00%
50th
Stock-Based Compensation Details [Line Items]
Payout (percent of target)	100.00%
25th
Stock-Based Compensation Details [Line Items]
Payout (percent of target)	35.00%
Below 25th
Stock-Based Compensation Details [Line Items]
Payout (percent of target)	0.00%

Revenue (Tables)

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of revenue

Revenues disaggregated by primary geographic markets, major product lines, and sales channels are as follows:



	Year Ended December 31,
	2019		2018		2017
Primary geographical markets⁽¹⁾
United States	$	5,429	$	5,610	$	5,790
Europe	2,326		2,625		2,697
Canada	518		569		648
Other	793		858		856
Total Revenues	$	9,066	$	9,662	$	9,991

Major product and services lines
Equipment⁽²⁾	$	2,062	$	2,178	$	2,152
Supplies, paper and other sales	1,165		1,276		1,260
Maintenance agreements⁽³⁾	2,372		2,603		2,809
Service arrangements⁽⁴⁾	2,517		2,674		2,722
Rental and other	706		663		754
Financing	244		268		294
Total Revenues⁽⁵⁾	$	9,066	$	9,662	$	9,991

Sales channels:
Direct equipment lease⁽⁶⁾	$	672	$	699	$	718
Distributors & resellers⁽⁷⁾	1,343		1,445		1,502
Customer direct	1,212		1,310		1,192
Total Sales	$	3,227	$	3,454	$	3,412

_____________


(1)	Geographic area data is based upon the location of the subsidiary reporting the revenue.


(2)	For the year ended December 31, 2017, Equipment sale revenues excluded $44 of equipment-related training revenue, which was classified as Services under previous revenue guidance - refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition.


(3)	Includes revenues from maintenance agreements on sold equipment as well as revenues associated with service agreements sold through our channel partners as Xerox Partner Print Services (XPPS).


(4)	Primarily includes revenues from our Managed Services offerings (formerly our Managed Documents Services arrangements). Also includes revenues from embedded operating leases, which were not significant.


(5)	Certain prior year amounts have been revised to conform to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Change in Presentation, for additional information.


(6)	Primarily reflects sales through bundled lease arrangements.

(7)

Primarily reflects sales through our two-tier distribution channels.

Capitalized contract cost



	Year Ended December 31,
	2019		2018
Incremental direct costs of obtaining a contract	$	78	$	84
Amortization of incremental direct costs	88		95

Employee Benefit Plans (Details) - USD ($) $ in Millions	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Amounts Recognized in the Consolidated Balance Sheets:
Pension and other benefit liabilities	$ (1,707)	$ (1,482)
Post-retirement medical benefits	(352)	(350)
Pension Plan
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation - ending	10,090
Change in Plan Assets:
Fair value of plan assets -beginning	8,087
Employer contributions	141
Fair value of plan assets - ending	8,878	8,087
Net Funded Status	(1,212)
Other Postretirement Benefits Plan
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation - beginning	385	723
Service cost	2	4	$ 5
Interest cost	15	23	28
Plan participants' contributions	10	3
Actuarial loss (gain)	8	(63)
Currency exchange rate changes	5	(11)
Plan Amendments/Curtailments	0	(234)
Benefits paid/settlements	(40)	(60)
Other	0	0
Benefit obligation - ending	385	385	723
Change in Plan Assets:
Fair value of plan assets -beginning	0	0
Actual return on plan assets	0	0
Employer contributions	30	57
Plan participants' contributions	10	3
Currency exchange rate changes	0	0
Benefits paid/settlements	(40)	(60)
Other	0	0
Fair value of plan assets - ending	0	0	0
Net Funded Status	(385)	(385)
Amounts Recognized in the Consolidated Balance Sheets:
Other long-term assets	0	0
Accrued compensation and benefit costs	(33)	(35)
Pension and other benefit liabilities	0	0
Post-retirement medical benefits	(352)	(350)
Net Amounts Recognized	(385)	(385)
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract]
Net actuarial loss (gain)	(29)	(42)
Prior service (credit) cost	(164)	(240)
Total Pre-tax loss (gain)	(193)	(282)
United States \| Pension Plan
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation - beginning	3,234	4,180
Service cost	2	2	2
Interest cost	218	63	226
Plan participants' contributions	0	0
Actuarial loss (gain)	564	(288)
Currency exchange rate changes	0	0
Plan Amendments/Curtailments	0	0
Benefits paid/settlements	(420)	(723)
Other	0	0
Benefit obligation - ending	3,598	3,234	4,180
Change in Plan Assets:
Fair value of plan assets -beginning	2,358	3,224
Actual return on plan assets	529	(170)
Employer contributions	26	27
Plan participants' contributions	0	0
Currency exchange rate changes	0	0
Benefits paid/settlements	(420)	(723)
Other	0	0
Fair value of plan assets - ending	2,493	2,358	3,224
Net Funded Status	(1,105)	(876)
Amounts Recognized in the Consolidated Balance Sheets:
Other long-term assets	0	0
Accrued compensation and benefit costs	(25)	(25)
Pension and other benefit liabilities	(1,080)	(851)
Post-retirement medical benefits	0	0
Net Amounts Recognized	(1,105)	(876)
Accumulated Benefit Obligation	3,598	3,234
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract]
Net actuarial loss (gain)	1,059	933
Prior service (credit) cost	(3)	(5)
Total Pre-tax loss (gain)	1,056	928
Foreign Plan \| Pension Plan
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation - beginning	6,007	6,703
Service cost	22	27	29
Interest cost	153	149	158
Plan participants' contributions	3	4
Actuarial loss (gain)	472	(293)
Currency exchange rate changes	114	(339)
Plan Amendments/Curtailments	(2)	41
Benefits paid/settlements	(270)	(281)
Other	(7)	(4)
Benefit obligation - ending	6,492	6,007	6,703
Change in Plan Assets:
Fair value of plan assets -beginning	5,729	6,308
Actual return on plan assets	680	(85)
Employer contributions	115	117
Plan participants' contributions	3	4
Currency exchange rate changes	135	(329)
Benefits paid/settlements	(270)	(281)
Other	(7)	(5)
Fair value of plan assets - ending	6,385	5,729	$ 6,308
Net Funded Status	(107)	(278)
Amounts Recognized in the Consolidated Balance Sheets:
Other long-term assets	451	281
Accrued compensation and benefit costs	(22)	(24)
Pension and other benefit liabilities	(536)	(535)
Post-retirement medical benefits	0	0
Net Amounts Recognized	(107)	(278)
Accumulated Benefit Obligation	6,326	5,847
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract]
Net actuarial loss (gain)	1,462	1,457
Prior service (credit) cost	22	19
Total Pre-tax loss (gain)	$ 1,484	$ 1,476

Other Comprehensive (Loss) Income

12 Months Ended

Dec. 31, 2019

Other Comprehensive Income [Abstract]

Other Comprehensive (Loss) Income

As previously disclosed in Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, the historical statement of Comprehensive Income has not been revised to reflect the discontinued operations reporting for the Sales of our investments in Fuji Xerox and Xerox International Partners. However, in 2019, as a result of the sale of our investment in Fuji Xerox, we reclassified out of Accumulated other comprehensive loss and into earnings $165 of accumulated translation adjustments and defined benefit plan losses related to Fuji Xerox. The reclassified amounts are included in the gain recognized on the Sales. Refer to Note 7 - Divestitures for additional information regarding these Sales and the associated gain recognized.

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



	Year Ended December 31,
	2019						2018						2017
	Pre-tax			Net of Tax			Pre-tax			Net of Tax			Pre-tax			Net of Tax
Translation Adjustments Gains (Losses)
Aggregate adjustment in period	$	53		$	45		$	(251	)	$	(242	)	$	484		$	483
Divestiture - reclassification	17			17			—			—			—			—
Net Translation Adjustments Gains (Losses)	70			62			(251		)	(242		)	484			483
Unrealized Gains (Losses)
Changes in fair value of cash flow hedges gains (losses)	2			1			9			8			(28		)	(23		)
Changes in cash flow hedges reclassed to earnings⁽¹⁾	(9		)	(7		)	14			10			35			25
Other losses	—			—			(2		)	(2		)	(1		)	(1		)
Net Unrealized (Losses) Gains	(7		)	(6		)	21			16			6			1

Defined Benefit Plans (Losses) Gains
Net actuarial/prior service (losses) gains	(275		)	(202		)	273			198			52			64
Prior service amortization/curtailment⁽²⁾	(81		)	(61		)	(26		)	(20		)	(10		)	(7		)
Actuarial loss amortization/settlement⁽²⁾	156			118			252			190			236			158
Fuji Xerox changes in defined benefit plans, net⁽³⁾	8			8			(25		)	(25		)	29			29
Other (losses) gains⁽⁴⁾	(21		)	(21		)	66			66			(138		)	(138		)
Divestiture - reclassification	148			148			—			—			—			—
Changes in Defined Benefit Plans (Losses) Gains	(65		)	(10		)	540			409			169			106

Other Comprehensive (Loss) Income	(2		)	46			310			183			659			590
Less: Other comprehensive income attributable to noncontrolling interests	—			—			—			—			1			1
Other Comprehensive (Loss) Income Attributable to Xerox Holdings	$	(2	)	$	46		$	310		$	183		$	658		$	589

_____________


(1)	Reclassified to Cost of sales - refer to Note 17 - Financial Instruments for additional information regarding our cash flow hedges.


(2)	Reclassified to Total Net Periodic Benefit Cost - refer to Note 19 - Employee Benefit Plans for additional information.


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


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

Accumulated Other Comprehensive Loss (AOCL)

AOCL is comprised of the following:



	December 31,
	2019			2018			2017
Cumulative translation adjustments	$	(1,961	)	$	(2,023	)	$	(1,781	)
Other unrealized (losses) gains, net	(2		)	4			(12		)
Benefit plans net actuarial losses and prior service credits⁽¹⁾⁽²⁾	(1,683		)	(1,546		)	(1,955		)
Total Accumulated Other Comprehensive Loss Attributable to Xerox Holdings	$	(3,646	)	$	(3,565	)	$	(3,748	)

_____________


(1)	Amounts prior to 2019 include our share of Fuji Xerox balances.


(2)	The change from December 31, 2018 includes $(127) related to the adoption of ASU 2018-02 and the reclassification of stranded tax effects resulting from the Tax Act - Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information.

We utilize the aggregate portfolio approach for releasing disproportionate income tax effects from AOCL.

Financial Instruments - Foreign Exchange Risk Management (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	$ 1,091
Average maturity of foreign exchange hedging contracts - within three months (percent)	82.00%
Average maturity of foreign exchange hedging contracts - within three months and six months (percent)	9.00%
Average maturity of foreign exchange hedging contracts - within six and twelve months (percent)	9.00%
Derivative assets (liabilities), at fair value, net	$ (5)	$ 11
Japanese Yen/U.S. Dollar
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	369
Japanese Yen/Euro
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	264
U.S. Dollar/Euro
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	122
Euro/U.S. Dollar
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	71
Euro/U.K. Pound Sterling
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	64
U.S. Dollar/Canadian Dollar
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	50
Euro/Danish Krone
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	29
U.K. Pound Sterling/Euro
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	27
U.S. Dollar/Russian Ruble
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	22
U.S. Dollar/Japanese Yen
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	14
Euro/Swiss Franc
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	12
U.S. Dollar/Israeli Shekel
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	9
All Other
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative notional value	38
Foreign exchange contract
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	(6)
Foreign exchange contract \| Japanese Yen/U.S. Dollar
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	(2)
Foreign exchange contract \| Japanese Yen/Euro
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	(3)
Foreign exchange contract \| U.S. Dollar/Euro
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	0
Foreign exchange contract \| Euro/U.S. Dollar
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	0
Foreign exchange contract \| Euro/U.K. Pound Sterling
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	0
Foreign exchange contract \| U.S. Dollar/Canadian Dollar
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	(1)
Foreign exchange contract \| Euro/Danish Krone
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	0
Foreign exchange contract \| U.K. Pound Sterling/Euro
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	0
Foreign exchange contract \| U.S. Dollar/Russian Ruble
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	(1)
Foreign exchange contract \| U.S. Dollar/Japanese Yen
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	0
Foreign exchange contract \| Euro/Swiss Franc
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	0
Foreign exchange contract \| U.S. Dollar/Israeli Shekel
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	0
Foreign exchange contract \| All Other
Summary of Foreign Exchange Hedging Positions [Abstract]
Derivative, fair value, net	$ 1

Income and Other Taxes - Allocation of Income Tax Expense Benefit (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Interperiod Allocaion [Line Items]
Pre-tax income	$ 179	$ 247	$ 468
Discontinued operations	95	10	1
Retained Earnings	0	36	0
Total Income Tax Expense	226	420	538
Changes in defined benefit plans
Income Tax Interperiod Allocaion [Line Items]
Other comprehensive income (loss), tax	(55)	131	63
Cash flow hedges
Income Tax Interperiod Allocaion [Line Items]
Other comprehensive income (loss), tax	(1)	5	5
Translation adjustments
Income Tax Interperiod Allocaion [Line Items]
Other comprehensive income (loss), tax	$ 8	$ (9)	$ 1

Amount of tax expense (benefit) related to a discontinued operation. Includes, but is not limited to, tax expense (benefit) related to income (loss) from operations during the phase-out period, tax expense (benefit) related to gain (loss) on disposal, tax expense (benefit) related to gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and tax expense (benefit) related to adjustments of a prior period gain (loss) on disposal.

Schedule of business acquisitions

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

The following table summarizes the purchase price allocations for our 2019 acquisitions as of the acquisition dates:



	Weighted-Average Life (Years)	Total 2019 Acquisitions
Accounts/finance receivables		$	3
Intangible assets:
Customer relationships	10	19
Trademarks	5	2
Goodwill		14
Other assets		3
Total Assets acquired		41
Liabilities assumed		(3		)
Total Purchase Price		$	38

Divestitures - Discontinued Operation - Income Statement (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	$ 79	$ 168	$ 274
Income (loss) from operations	176	74	138
Gain on disposal	629	0	0
Income before income taxes	805	74	138
Income tax expense	95	10	1
Income from discontinued operations, net of tax	710	64	137
Income from discontinued operations attributable to noncontrolling interests, net of tax	5	9	8
Income from discontinued operations, attributable to Xerox, net of tax	705	55	129
Cost of revenues	44	110	218
Other expenses	6	9	20
Total Costs and Expenses	50	119	238
Depreciation and amortization	0	0	1
Restructuring and related costs	0	1	0
Equity in net income of FX	147	25	102
Capital expenditures	$ 0	$ 0	0
Business Process Outsourcing
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income from discontinued operations, attributable to Xerox, net of tax			3
Loss from operations			(9)
Tax benefit from disposal			$ 12

Restructuring Programs (Details) - USD ($) $ in Millions	12 Months Ended
Restructuring Programs (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Restructuring reserve [Roll Forward]
Balance at beginning of period	$ 95	$ 109	$ 127
Restructuring provision	161	189	232
Reversals of prior charges	(34)	(33)	(35)
Net Current Period Charges	127	156	197
Charges against reserve and currency	(152)	(170)	(215)
Balance at end of period	70	95	109
Write-off of leased right-of-use assets	39
Write-off of owned assets	22
Reconciliation to the Condensed Consolidated Statements of Cash Flows [Abstract]
Asset impairments	56	0	7
Effects of foreign currency and other non-cash items	3	1	(12)
Restructuring Cash Payments	(93)	(169)	(220)
Severance and Related Costs
Restructuring reserve [Roll Forward]
Balance at beginning of period	94	108	104
Restructuring provision	81	175	221
Reversals of prior charges	(24)	(33)	(29)
Net Current Period Charges	57	142	192
Charges against reserve and currency	(85)	(156)	(188)
Balance at end of period	66	94	108
Other Contractual Termination Costs
Restructuring reserve [Roll Forward]
Balance at beginning of period	1	1	23
Restructuring provision	19	14	4
Reversals of prior charges	(5)	0	(6)
Net Current Period Charges	14	14	(2)
Charges against reserve and currency	(11)	(14)	(20)
Balance at end of period	4	1	1
Asset Impairments
Restructuring reserve [Roll Forward]
Balance at beginning of period	0	0	0
Restructuring provision	61	0	7
Reversals of prior charges	(5)	0	0
Net Current Period Charges	56	0	7
Charges against reserve and currency	(56)	0	(7)
Balance at end of period	$ 0	$ 0	$ 0

Basis of Presentation and Summary of Significant Accounting Policies - Change in Presentation (Details) - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

$ 9,066

$ 9,662

$ 9,991

^[1]

3,227

3,454

3,412

Sales | Previously Reported

^[1]

2,097

2,188

2,133

3,805

3,801

Sales | Restatement Adjustment

2,305

2,273

(351)

(389)

(117)

(140)

Service

^[1]

5,595

5,940

6,285

Service | Previously Reported

^[1]

$ 3,188

3,473

3,654

5,589

5,896

Service | Restatement Adjustment

3,356

3,514

351

389

Changes in Estimates - Methodology

$ 117

$ 140

[1]	Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information.

Supplementary Financial Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Other Current Assets
Total Other Current Assets	$ 201	$ 191
Other Long-term Assets
Internal use software, net	122	154
Customer contract costs, net	163	172
Operating lease right-of-use asset	319
Investments in affiliates, at equity	46	1,403
Total Other Long-term Assets	1,338	902
Accrued Expenses and Other Current Liabilities
Operating lease obligation	87
Restructuring related costs	37
Total Accrued Expenses and Other Current Liabilities	984	848
Other Long-term Liabilities
Operating lease obligation	260
Total Other Long-term Liabilities	512	269
Cash and cash equivalents	2,740	1,081
Litigation deposits in Brazil	55	61
Other restricted cash	0	3
Total Restricted Cash	55	64
Cash, cash equivalents and restricted cash of continuing operations	2,795	1,145
Cash, cash equivalents and restricted cash of discontinued operations	0	3
Cash, cash equivalents and restricted cash	2,795	1,148	$ 1,368	$ 2,402
Accrued compensation liabilities	69	73
Deferred compensation liabilities	22	23
Pension and other benefit liabilities	1,707	1,482
Provision for receivables	49	40	46
Provision for inventory	24	30	27
Provision for product warranty	12	14	15
Depreciation of buildings and equipment	101	148	136
Depreciation and obsolescence of equipment on operating leases	225	249	265
Amortization of internal use software	59	81	65
Amortization of product software	0	0	4
Amortization of acquired intangible assets	45	48	53
Amortization of customer contract costs	93	100	4
Cost of additions to land, buildings and equipment	41	55	69
Cost of additions to internal use software	24	35	36
Common stock dividends - Xerox Holdings	229	255	274
Preferred stock dividends - Xerox Holdings	14	14	17
Payments to noncontrolling interests	14	17	18
Repurchases related to stock-based compensation - Xerox Holdings	28	9	$ 15
Executive Officer
Other Long-term Liabilities
Deferred compensation liabilities	4	7
Fair Value, Recurring \| Level 2
Other Long-term Liabilities
Financial liabilities, fair value	26	20
Pension Plan
Other Long-term Liabilities
Pension liabilities	1,616	1,386
Other Current Assets
Other Current Assets
Income taxes receivable	27	14
Royalties, license fees and software maintenance	25	20
Restricted cash	0	1
Prepaid expenses	29	31
Derivative instruments	2	15
Advances and deposits	30	28
Other	88	82
Other Long-term Assets
Other Long-term Assets
Income taxes receivable	9	8
Prepaid pension costs	451	281
Internal use software, net	122	154
Restricted cash	55	63
Debt issuance costs, net	3	4
Customer contract costs, net	176	184
Operating lease right-of-use asset	319
Deferred compensation plan investments	19	16
Investments in affiliates, at equity	46	43
Other	137	149
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities
Income taxes payable	7	33
Other taxes payable	79	77
Operating lease obligation	87
Finance lease obligation	2
Interest payable	38	41
Restructuring reserves	70	93
Restructuring related costs	37	0
Derivative instruments	8	1
Product warranties	6	5
Dividends payable	66	69
Distributor and reseller rebates/commissions	167	158
Unearned income and other revenue deferrals	158	155
Other	259	216
Other Long-term Liabilities
Other Long-term Liabilities
Deferred taxes	37	51
Income taxes payable	64	18
Operating lease obligation	260
Finance lease obligation	5
Environmental reserves	9	9
Restructuring reserves	0	2
Other	137	189
Interest rate swaps \| Fair Value, Recurring \| Level 2
Other Long-term Liabilities
Financial liabilities, fair value	0	3
Deferred compensation liabilities \| Fair Value, Recurring \| Level 2
Other Long-term Liabilities
Financial liabilities, fair value	18	16
Derivatives Designated as Hedging Instruments \| Interest rate swaps \| Other Long-term Assets
Other Long-term Assets
Derivative instruments	$ 1	$ 0

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Basis of Consolidation

Discontinued Operations

Use of Estimates

Changes in Estimates

New Accounting Pronouncements, Policy

New Accounting Standards and Accounting Changes

Except for the Accounting Standard Updates (ASUs) discussed below, the new ASUs issued by the FASB during the last two years did not have any significant impact on the Company.

Accounting Standard Updates to be Adopted:

Financial Instruments - Credit Losses and Derivatives

Intangibles - Internal-Use Software

Income Taxes

Accounting Standard Updates Recently Adopted:

Leases

Financial Instruments - Derivatives

Income Taxes

Revenue Recognition

variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.

Other Updates


•	Investments: ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). This update is effective for our fiscal year beginning January 1, 2021.


•	Compensation - Stock Compensation and Revenue from Contracts with Customers: ASU 2019-08, (Topic 718) and (Topic 606) Codification Improvements - Share-Based Consideration Payable to a Customer. This update is effective for our fiscal year beginning January 1, 2020.


•	Collaborative Arrangements: ASU 2018-18, (Topic 808) Clarifying the Interaction between Topic 808 and Topic 606. This update is effective for our fiscal year beginning January 1, 2020.


•	Compensation - Retirement Benefits - Defined Benefit Plans - General: ASU 2018-14, (Topic 715-20) Changes to the Disclosure Requirements for Defined Benefit Plans. We elected to early adopt this update effective for our fiscal year ended December 31, 2019. Refer to Note 19 - Employee Benefit Plans for changes in the disclosures for our Defined Benefit Plans.

•

Fair Value Measurement: ASU 2018-13, (Topic 820) Disclosure Framework. This update is effective for our fiscal year beginning January 1, 2020.

Revenue Recognition

Revenue Recognition (Policies subsequent to the adoption of ASU 2014-09 - ASC Topic 606)

Significant judgments primarily include the identification of performance obligations in our Document management services arrangements as well the pattern of delivery for those services.

More specifically, revenue related to our products and services is generally recognized as follows:

Supplies: Supplies revenue is recognized upon transfer of control to the customer, generally upon utilization or shipment to the customer in accordance with the sales contract terms.

Financing: Finance income attributable to sales-type leases, direct financing leases and installment loans is recognized on the accrual basis using the effective interest method.

Other Revenue Recognition Policies

Shipping and Handling: Shipping and handling costs are accounted for as a fulfillment cost and are included in Cost of sales in the Consolidated Statements of Income.

Refer to Note 4 - Revenue for additional information regarding revenue recognition policies with respect to contract assets and liabilities as well as contract costs.

Revenue Recognition

Revenue Recognition (Policies prior to the adoption of ASU 2014-09 - ASC Topic 606)

Supplies: Supplies revenue generally is recognized upon shipment or utilization by customers in accordance with the sales contract terms.

Leases

Financing

Financing: Finance income attributable to sales-type leases, direct financing leases and installment loans is recognized on the accrual basis using the effective interest method.

Services

Long-lived assets used in the fulfillment of service arrangements are capitalized and depreciated over the shorter of their useful life or the term of the contract if an asset is contract specific.

Our services contracts may also include the sale of equipment and software. In these instances, we follow the policies noted above under Equipment-Related Revenues.

Multiple Element Arrangements

Multiple Element Arrangements: As described above, we enter into the following revenue arrangements that may consist of multiple deliverables:


•	Bundled lease arrangements, which typically include both lease deliverables and non-lease deliverables as described above.


•	Contracts for multiple types of document related services including professional and value-added services. For instance, we may contract for an implementation of a printing solution and also provide services to operate the solution over a period of time; or we may contract to scan, manage and store customer documents.

In substantially all of our multiple element arrangements, we are able to separate the deliverables since we normally will meet both of the following criteria:


•	The delivered item(s) has value to the customer on a stand-alone basis; and


•	If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control.

Income Tax, Policy

Shipping and Handling

Costs related to shipping and handling are recognized as incurred and included in Cost of sales in the Consolidated Statements of Income.

Research, Development and Engineering (RD&E)

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, including money market funds, and investments with original maturities of three months or less.

Receivable Sales

Inventories

Land, Buildings and Equipment on Operating Leases

Software - Internal Use and Product

Capitalization of Internal Costs

Software - Internal Use and Product

Goodwill and Other Intangible Assets, Impairment of Long-Lived Assets

Goodwill and Other Intangible Assets

Impairment or Disposal of Long-Lived Assets

Impairment of Long-Lived Assets

Pension and Post-Retirement Benefit Obligations

Foreign Currency Translation and Remeasurement

Lessee Leases

Lessee Accounting Policies:

Lessee Summary:

Operating Leases

Lessor Leases

Lessor Accounting Policies: The following represent the updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842 effective January 1, 2019:

Bundled Lease Arrangements: A portion of our direct sales of equipment to end customers are made through bundled lease arrangements which typically include equipment, services (maintenance and managed services) and financing components where the customer pays a single negotiated fixed minimum monthly payment for all elements over the contractual lease term. These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page. Revenues under these bundled lease arrangements are allocated considering the relative standalone selling prices of the lease and non-lease deliverables included in the bundled arrangement. Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies. Consistent with the guidance in ASC 842 and ASC 606, regarding the allocation of fixed and variable consideration, we only consider the fixed payments for purposes of allocation to the lease elements of the contract. The fixed minimum monthly payments are multiplied by the number of months in the contract term to arrive at the total fixed lease payments that the customer is obligated to make over the lease term. Amounts allocated to the equipment and financing elements are then subjected to the accounting estimates noted below under Leases to ensure the values reflect standalone selling prices.

The remainder of any fixed payments, as well as the variable payments, are allocated to non-lease elements because the variable consideration for incremental page volume or usage is considered attributable to the delivery of those elements. The consideration for the non-lease elements is not dependent on the consideration for equipment and vice versa and the consideration for the equipment and services is priced at the appropriate standalone values; therefore, the relative standalone selling price allocation method is not necessary. The revenue associated with the non-lease elements are normally accounted for as a single performance obligation being delivered in a series with delivery being measured as the usage billed to the customer. Accordingly, revenue from these agreements is recognized in a manner consistent with the guidance for Maintenance and Services agreements (Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies).

Leases: The two primary accounting provisions we use to classify transactions as sales-type or operating leases are: (i) a review of the lease term to determine if it is for the major part of the economic life of the underlying equipment (defined as greater than 75%); and (ii) a review of the present value of the lease payments to determine if they are equal to or greater than substantially all of the fair market value of the equipment at the inception of the lease (defined as greater than 90%). Equipment placements included in arrangements meeting these conditions are accounted for as sales-type leases and revenue is recognized in a manner consistent with Equipment. Equipment placements included in arrangements that do not meet these conditions are accounted for as operating leases and revenue is recognized over the term of the lease.

We perform an analysis of the stand-alone selling price of equipment based on cash selling prices during the applicable period. The cash selling prices are compared to the range of values determined for our leases. The range of cash selling prices must be reasonably consistent with the lease selling prices in order for us to determine that such lease prices reflects stand-alone value.

Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above.

Additional Lease Payments: Certain leases may require the customer to pay property taxes and insurance on the equipment. In these instances, the amounts for property taxes and insurance that we invoice to customers and pay to third parties are considered variable payments and are recorded as other revenues and other cost of revenues, respectively. Amounts related to property taxes and insurance are not material. We exclude from variable payments all lessor costs that are explicitly required to be paid directly by a lessee on behalf of the lessor to a third party.

Presentation: Revenue from sales-type leases is presented on a gross basis when the company enters into a lease to realize value from a product that it would otherwise sell in its ordinary course of business, whereas in transactions where the company enters into a lease for the purpose of generating revenue by providing financing, the profit or loss, if any, is presented on a net basis. In addition, we have elected to account for sales tax and other similar taxes collected from a lessee as lessee costs and therefore we exclude these costs from contract consideration and variable consideration and present revenue net of these costs.

Other Revenue Recognition



	Year Ended December 31,
	2019		2018
Incremental direct costs of obtaining a contract	$	78	$	84
Amortization of incremental direct costs	88		95

Interest Expense, Policy

Fair Value of Financial Assets and Liabilities

Restructuring Programs (Tables)

12 Months Ended

Dec. 31, 2019

Restructuring and Related Activities [Abstract]

Restructuring program activity

A summary of our restructuring program activity for the three years ended December 31, 2019, 2018 and 2017 is as follows:



	Severance and Related Costs			Other Contractual Termination Costs⁽²⁾			Asset Impairments⁽³⁾⁽⁴⁾			Total
Balance at December 31, 2016	$	104		$	23		$	—		$	127
Restructuring provision	221			4			7			232
Reversals of prior charges	(29		)	(6		)	—			(35		)
Net Current Period Charges⁽¹⁾	192			(2		)	7			197
Charges against reserve and currency	(188		)	(20		)	(7		)	(215		)
Balance at December 31, 2017	$	108		$	1		$	—		$	109
Restructuring provision	175			14			—			189
Reversals of prior charges	(33		)	—			—			(33		)
Net Current Period Charges⁽¹⁾	142			14			—			156
Charges against reserve and currency	(156		)	(14		)	—			(170		)
Balance at December 31, 2018	$	94		$	1		$	—		$	95
Restructuring provision	81			19			61			161
Reversals of prior charges	(24		)	(5		)	(5		)	(34		)
Net Current Period Charges⁽¹⁾	57			14			56			127
Charges against reserve and currency	(85		)	(11		)	(56		)	(152		)
Balance at December 31, 2019	$	66		$	4		$	—		$	70

_____________


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


(2)	Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs.


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


(4)	2019 amounts primarily relate to the exit and abandonment of leased and owned facilities. The charge includes the accelerated write-off of $39 for leased right-of-use assets and $22 for owned assets and are net of any potential sublease income or other recovery amounts.

Reconciliation to the consolidated statements of cash flows

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



	Year Ended December 31,
	2019			2018			2017
Charges against reserve and currency	$	(152	)	$	(170	)	$	(215	)
Asset impairments	56			—			7
Effects of foreign currency and other non-cash items	3			1			(12		)
Restructuring Cash Payments	$	(93	)	$	(169	)	$	(220	)

Restructuring and related costs

In connection with our restructuring programs, we also incurred certain related costs as follows:



	Year Ended December 31, 2019
Retention related severance/bonuses⁽¹⁾	$	39
Contractual severance costs⁽²⁾	43
Consulting and other costs⁽³⁾	20
	$	102

_____________


(1)	Includes retention related severance and bonuses for employees expected to continue working beyond their minimum retention period before termination.


(2)	Reflects estimated severance and other related costs we are contractually required to pay on employees transferred (approximately 2,200) as part of the shared service arrangement entered into with HCL Technologies.

(3)

Represents professional support services associated with our business transformation initiatives.

Other Comprehensive (Loss) Income (Tables)

12 Months Ended

Dec. 31, 2019

Other Comprehensive Income [Abstract]

Schedule of amounts recognized in other comprehensive income (loss)

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



	Year Ended December 31,
	2019						2018						2017
	Pre-tax			Net of Tax			Pre-tax			Net of Tax			Pre-tax			Net of Tax
Translation Adjustments Gains (Losses)
Aggregate adjustment in period	$	53		$	45		$	(251	)	$	(242	)	$	484		$	483
Divestiture - reclassification	17			17			—			—			—			—
Net Translation Adjustments Gains (Losses)	70			62			(251		)	(242		)	484			483
Unrealized Gains (Losses)
Changes in fair value of cash flow hedges gains (losses)	2			1			9			8			(28		)	(23		)
Changes in cash flow hedges reclassed to earnings⁽¹⁾	(9		)	(7		)	14			10			35			25
Other losses	—			—			(2		)	(2		)	(1		)	(1		)
Net Unrealized (Losses) Gains	(7		)	(6		)	21			16			6			1

Defined Benefit Plans (Losses) Gains
Net actuarial/prior service (losses) gains	(275		)	(202		)	273			198			52			64
Prior service amortization/curtailment⁽²⁾	(81		)	(61		)	(26		)	(20		)	(10		)	(7		)
Actuarial loss amortization/settlement⁽²⁾	156			118			252			190			236			158
Fuji Xerox changes in defined benefit plans, net⁽³⁾	8			8			(25		)	(25		)	29			29
Other (losses) gains⁽⁴⁾	(21		)	(21		)	66			66			(138		)	(138		)
Divestiture - reclassification	148			148			—			—			—			—
Changes in Defined Benefit Plans (Losses) Gains	(65		)	(10		)	540			409			169			106

Other Comprehensive (Loss) Income	(2		)	46			310			183			659			590
Less: Other comprehensive income attributable to noncontrolling interests	—			—			—			—			1			1
Other Comprehensive (Loss) Income Attributable to Xerox Holdings	$	(2	)	$	46		$	310		$	183		$	658		$	589

_____________


(1)	Reclassified to Cost of sales - refer to Note 17 - Financial Instruments for additional information regarding our cash flow hedges.


(2)	Reclassified to Total Net Periodic Benefit Cost - refer to Note 19 - Employee Benefit Plans for additional information.


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

(4)

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

Schedule of accumulated other comprehensive loss

AOCL is comprised of the following:



	December 31,
	2019			2018			2017
Cumulative translation adjustments	$	(1,961	)	$	(2,023	)	$	(1,781	)
Other unrealized (losses) gains, net	(2		)	4			(12		)
Benefit plans net actuarial losses and prior service credits⁽¹⁾⁽²⁾	(1,683		)	(1,546		)	(1,955		)
Total Accumulated Other Comprehensive Loss Attributable to Xerox Holdings	$	(3,646	)	$	(3,565	)	$	(3,748	)

_____________


(1)	Amounts prior to 2019 include our share of Fuji Xerox balances.

(2)

The change from December 31, 2018 includes $(127) related to the adoption of ASU 2018-02 and the reclassification of stranded tax effects resulting from the Tax Act - Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information.

Employee Benefit Plans - Accumulated Benefit Obligation in Excess of Plan Assets (Details) - Pension Plan - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	$ 4,834	$ 4,393
Fair Value of Plan Assets	3,190	2,982
Benefit Obligation	4,857	4,578
Fair Value of Plan Assets	3,190	3,140
Fair Value of Pension Plan Assets	8,878	8,087
Pension Benefit Obligations	10,090
Net Funded Status	(1,212)
United States
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	3,598	3,234
Fair Value of Plan Assets	2,493	2,358
Benefit Obligation	3,598	3,234
Fair Value of Plan Assets	2,493	2,358
Fair Value of Pension Plan Assets	2,493	2,358	$ 3,224
Pension Benefit Obligations	3,598	3,234	4,180
Net Funded Status	(1,105)	(876)
Foreign Plan
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	1,236	1,159
Fair Value of Plan Assets	697	624
Benefit Obligation	1,259	1,344
Fair Value of Plan Assets	697	782
Fair Value of Pension Plan Assets	6,385	5,729	6,308
Pension Benefit Obligations	6,492	6,007	$ 6,703
Net Funded Status	(107)	(278)
U.K.
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets	4,169
Pension Benefit Obligations	3,798
Net Funded Status	371
Netherlands
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets	1,083
Pension Benefit Obligations	1,101
Net Funded Status	(18)
Canada
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets	721
Pension Benefit Obligations	738
Net Funded Status	(17)
Germany
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets	0
Pension Benefit Obligations	367
Net Funded Status	(367)
Other
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets	412
Pension Benefit Obligations	488
Net Funded Status	(76)
Underfunded Plan \| United States
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	3,261	2,918
Fair Value of Plan Assets	2,493	2,358
Benefit Obligation	3,261	2,918
Fair Value of Plan Assets	2,493	2,358
Underfunded Plan \| Foreign Plan
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	767	713
Fair Value of Plan Assets	697	624
Benefit Obligation	780	888
Fair Value of Plan Assets	697	782
Unfunded Plan \| United States
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	337	316
Fair Value of Plan Assets	0	0
Benefit Obligation	337	316
Fair Value of Plan Assets	0	0
Fair Value of Pension Plan Assets	0
Pension Benefit Obligations	337
Net Funded Status	(337)
Unfunded Plan \| Foreign Plan
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	469	446
Fair Value of Plan Assets	0	0
Benefit Obligation	479	456
Fair Value of Plan Assets	0	$ 0
Funded Plan \| United States
Defined Benefit Plan Disclosure [Line Items]
Fair Value of Pension Plan Assets	2,493
Pension Benefit Obligations	3,261
Net Funded Status	$ (768)

Adoption of New Leasing Standard - Lessor

12 Months Ended

Dec. 31, 2019

Adoption of New Leasing Standard - Lessor

Lessor Accounting Policies: The following represent the updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842 effective January 1, 2019:

Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above.

The components of lease income are as follows:



	Location in Statements of Income	Year Ended December 31,
	Location in Statements of Income	2019		2018
Lease income - sales type	Sales	$	672	$	699
Interest income on lease receivables	Financing	244		268
Lease income - operating leases	Services, maintenance and rentals	396		438
Variable lease income	Services, maintenance and rentals	107		120
Total Lease income		$	1,419	$	1,525

Profit at lease commencement on sales type leases was estimated to be approximately $276 and $302 for the two years ended December 31, 2019 and 2018, respectively.

Adoption of New Leasing Standard - Lessor

Lessor Accounting Policies: The following represent the updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842 effective January 1, 2019:

Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above.

The components of lease income are as follows:



	Location in Statements of Income	Year Ended December 31,
	Location in Statements of Income	2019		2018
Lease income - sales type	Sales	$	672	$	699
Interest income on lease receivables	Financing	244		268
Lease income - operating leases	Services, maintenance and rentals	396		438
Variable lease income	Services, maintenance and rentals	107		120
Total Lease income		$	1,419	$	1,525

Profit at lease commencement on sales type leases was estimated to be approximately $276 and $302 for the two years ended December 31, 2019 and 2018, respectively.

Adoption of New Leasing Standard - Lessor

Lessor Accounting Policies: The following represent the updated disclosures to our Revenue Recognition policies as a result of the adoption of ASC Topic 842 effective January 1, 2019:

Our lease pricing interest rates, which are used in determining customer payments in a bundled lease arrangement, are developed based upon a variety of factors including local prevailing rates in the marketplace and the customer’s credit history, industry and credit class. We reassess our pricing interest rates quarterly based on changes in the local prevailing rates in the marketplace. The pricing interest rates generally equal the implicit rates within the leases, as corroborated by our comparisons of cash to lease selling prices noted above.

The components of lease income are as follows:



	Location in Statements of Income	Year Ended December 31,
	Location in Statements of Income	2019		2018
Lease income - sales type	Sales	$	672	$	699
Interest income on lease receivables	Financing	244		268
Lease income - operating leases	Services, maintenance and rentals	396		438
Variable lease income	Services, maintenance and rentals	107		120
Total Lease income		$	1,419	$	1,525

Profit at lease commencement on sales type leases was estimated to be approximately $276 and $302 for the two years ended December 31, 2019 and 2018, respectively.

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Restatement to prior year income

Prior year amounts were also revised as follows to conform to the 2019 presentation.



	Year Ended December 31, 2018
	As Reported⁽¹⁾		Change			As Revised
Sales	$	3,805	$	(351	)	$	3,454
Services, maintenance and rentals	5,589		351			5,940

Cost of sales	$	2,305	$	(117	)	$	2,188
Cost of services, maintenance and rentals	3,356		117			3,473



	Year Ended December 31, 2017
	As Reported⁽¹⁾		Change			As Revised
Sales	$	3,801	$	(389	)	$	3,412
Services, maintenance and rentals	5,896		389			6,285

Cost of sales	$	2,273	$	(140	)	$	2,133
Cost of services, maintenance and rentals	3,514		140			3,654

_____________

(1)

As reported amounts have been restated to reflect the sale of our investment of XIP. Refer to Note 7 - Divestitures for additional information.

Adoption of New Leasing Standard - Lessee - Supplemental Information Related to Operating Leases (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows	$ 126
Right-of-use assets obtained in exchange for new lease liabilities	$ 75
Weighted-average remaining lease term (years)	4 years
Weighted-average discount rate (percentage)	5.47%

Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details)
$ / shares in Units, £ in Millions, $ in Millions

12 Months Ended

Aug. 01, 2019

USD ($)

$ / shares

Jul. 31, 2019

Jan. 01, 2019

USD ($)

Jan. 01, 2018

USD ($)

Dec. 31, 2019

USD ($)

country

service_offering

Dec. 31, 2018

USD ($)

Dec. 31, 2017

USD ($)

Dec. 31, 2018

GBP (£)

Reorganization, conversion ratio

Stock issued for conversion of convertible securities (shares) | shares

100

Par value of common stock (dollars per share) | $ / shares

$ 1

Number of countries in which entity operates | country

160

Cumulative effect of change in accounting principles

$ 9,066

$ 9,662

$ 9,991

$ 0

^[1]

120

Economic life of leased product

5 years

Sustaining engineering costs

$ 62

Number of reportable segments | service_offering

Number of reporting units | service_offering

Expected return on plan assets period

2 years

Accounting Standards Update 2016-02

^[2]

$ 3,227

3,454

3,412

Lessee accounting, increase to leased assets and liabilities

385

Lessee accounting, increase to leased assets and liabilities, undiscounted

440

Lessor accounting - increase to equipment sales

$ 30

Accounting Standards Update 2014-09

Transition asset

$ 153

Cumulative effect of change in accounting principles

$ 117

Accounting Standards Update 2014-09 | Sales

Out-of-period adjustment, gross | £

$ 44

United Kingdom, Pounds

£ (40)

United States of America, Dollars

Out-of-period adjustment, gross

Out-of-period adjustment, net

Minimum

Ownership percentage (percent)

20.00%

Maximum

Ownership percentage (percent)

50.00%

Common Stock

Value of stock issued for conversion of convertible securities

$ (221)

Retained Earnings

Cumulative effect of change in accounting principles

^[3]

$ 127

^[1]

120

Retained Earnings | Accounting Standards Update 2018-02

Tax cuts and jobs act, reclassification from AOCI to retained earnings, tax effect

$ 127

Retained Earnings | Accounting Standards Update 2014-09

Cumulative effect of change in accounting principles

^[3]

$ 117

[1]	Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies - Income Taxes for additional information related to the adoption of ASU 2018-02.
[2]	Certain prior year amounts have been conformed to the current year presentation. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information.
[3]	Includes $117 related to the adoption of the Revenue Recognition Standard ASU 2014-09 - Revenue from Contracts with Customers (ASC Topic 606), see Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, and $3 related to our share of Fuji Xerox's adoption of ASU 2016-01 - Financial Instruments - Classification and Measurement.

Income and Other Taxes - Unrecognized Tax Benefits Rollforward (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance, Beginning	$ 108	$ 125	$ 165
Additions related to current year	42	2	1
Additions related to prior years positions	17	3	10
Reductions related to prior years positions	(36)	(13)	(46)
Settlements with taxing authorities	(1)	(6)	(5)
Reductions related to lapse of statute of limitations	(3)	(3)	(3)
Currency	0	0	3
Balance, Ending	127	108	125
Tax positions, highly certain of realizability but with uncertainty of timing	3	8	8
Accruals for payment of interest and penalties	$ 2	$ 2	$ 5

Shareholders' Equity

12 Months Ended

Dec. 31, 2019

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

As disclosed in Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, as part of the reorganization of Xerox Holdings and Xerox into a holding company structure effective July 31, 2019, shareholders of Xerox became shareholders of Xerox Holdings on a one-for-one basis; maintaining the same number of shares and ownership percentage as held in Xerox immediately prior to the Reorganization.

Xerox Holdings

Preferred Stock

Xerox Holdings is authorized to issue approximately 22 million shares of cumulative preferred stock, $1.00 par value per share. Refer to Note 22 - Preferred Stock for additional information.

Common Stock

Xerox Holdings is authorized to issue 437.5 million shares of common stock, $1.00 par value per share. At December 31, 2019, 15 million shares were reserved for issuance under our incentive compensation plans and 7 million shares were reserved for conversion of the Series A Convertible Perpetual Preferred Voting Stock.

Treasury Stock

Xerox Holdings accounts for the repurchased common stock under the cost method and includes such treasury stock as a component of our common shareholders' equity. Retirement of treasury stock is recorded as a reduction of Common stock and Additional paid-in capital at the time such retirement is approved by our Board of Directors.

In July 2019, as part of the reorganization of Xerox Holdings and Xerox into a holding company structure, Xerox Holdings' Board of Directors authorized a $1.0 billion share repurchase program (exclusive of any commissions and other transaction fees and costs related thereto.) This program replaced the $1.0 billion of authority remaining under Xerox's previously authorized share repurchase program.



Authorized share repurchase program	$	2,000
Share repurchase cost	$	1,000
Share repurchase fees	$	1
Number of shares repurchased	35,339

The following provides cumulative information relating to Xerox Holdings' share repurchase program from its inception on July 31, 2019 through December 31, 2019 (shares in thousands):



Authorized share repurchase program	$	1,000
Share repurchase cost	$	300
Share repurchase fees	$	—
Number of shares repurchased	9,097

Of the $1.0 billion of share repurchase granted in 2019 by Xerox Holdings' Board of Directors, approximately $700 of that authority remained available as of December 31, 2019.



	Common Stock Shares		Treasury Stock Shares
Balance at December 31, 2016	253,594		—
Stock based compensation plans, net	1,019		—
Balance at December 31, 2017	254,613		—
Stock based compensation plans, net	1,103		—
Acquisition of Treasury stock	—		26,093
Cancellation of Treasury stock	(24,026	)	(24,026	)
Balance at December 31, 2018	231,690		2,067
Stock based compensation plans, net	1,310		—
Acquisition of Treasury stock	—		18,343
Cancellation of Treasury stock	(18,379	)	(18,379	)
Balance at December 31, 2019	214,621		2,031

Xerox

In connection with the Reorganization, the capital structure of Xerox was modified such that its issued and outstanding common shares are now entirely held by Xerox Holdings. Refer to Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for additional information regarding the Reorganization.

At December 31, 2019, Xerox has 1,000 authorized shares of common stock, $1.00 par value per share, of which 100 shares are issued and outstanding and held by Xerox Holdings.

Employee Benefit Plans - Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plans	$ 109	$ 175	$ 194
Net actuarial (gain) loss	(275)	273	52
Amortization of net actuarial (loss) gain	(156)	(252)	(236)
Amortization of net prior service credit	(81)	(26)	(10)
Total Recognized in Other Comprehensive Income	65	(540)	(169)
Interest expense on non-TRA obligations	243	258	257
Interest (income) expense allocated to TRA participant accounts	128	(46)	127
Expected Investment Income on Non-TRA Assets	315	357	321
Actual investment (loss) income on TRA assets	128	(46)	127
Other Postretirement Benefits Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	2	4	5
Interest cost	15	23	28
Expected return on plan assets	0	0	0
Recognized net actuarial loss (gain)	(5)	0	1
Amortization of prior service credit	(77)	(19)	(4)
Recognized settlement loss	0	0	0
Recognized curtailment gain	0	0	0
Defined Benefit Plans	(65)	8	30
Net Periodic Benefit Cost (Credit)	(65)	8	30
Net actuarial (gain) loss	8	(63)	(16)
Prior service cost (credit)	0	(234)	0
Amortization of net actuarial (loss) gain	5	0	(1)
Amortization of net prior service credit	77	19	4
Curtailment gain	0	0	0
Total Recognized in Other Comprehensive Income	90	(278)	(13)
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income	25	(270)	17
United States \| Pension Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	2	2	2
Interest cost	218	63	226
Expected return on plan assets	(210)	(67)	(227)
Recognized net actuarial loss (gain)	24	22	21
Amortization of prior service credit	(2)	(2)	(2)
Recognized settlement loss	93	173	133
Recognized curtailment gain	0	0	0
Defined Benefit Plans	125	191	153
Defined contribution plans	26	37	38
Net Periodic Benefit Cost (Credit)	151	228	191
Net actuarial (gain) loss	243	(50)	238
Prior service cost (credit)	0	0	0
Amortization of net actuarial (loss) gain	(117)	(195)	(154)
Amortization of net prior service credit	2	2	2
Curtailment gain	0	0	0
Total Recognized in Other Comprehensive Income	128	(243)	86
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income	279	(15)	277
Foreign Plan \| Pension Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	22	27	29
Interest cost	153	149	158
Expected return on plan assets	(233)	(244)	(221)
Recognized net actuarial loss (gain)	43	56	79
Amortization of prior service credit	(2)	(4)	(4)
Recognized settlement loss	1	1	2
Recognized curtailment gain	0	(1)	(2)
Defined Benefit Plans	(16)	(16)	41
Defined contribution plans	23	29	29
Net Periodic Benefit Cost (Credit)	7	13	70
Net actuarial (gain) loss	24	33	(273)
Prior service cost (credit)	0	41	(1)
Amortization of net actuarial (loss) gain	(44)	(57)	(81)
Amortization of net prior service credit	2	4	4
Curtailment gain	0	1	0
Total Recognized in Other Comprehensive Income	(18)	22	(351)
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive (Loss) Income	$ (11)	35	$ (281)
United States of America, Dollars
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Out-of-period adjustment, gross		$ (53)

Segment and Geographic Area Reporting

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment and Geographic Area Reporting

Segment Discussion

We manage our operations on a geographic basis and are primarily organized from a sales perspective on the basis of “go-to-market” sales channels. These sales channels are structured to serve a range of customers for our products and services. As a result of this structure, we concluded that we have one operating and reportable segment - the design, development and sale of document management systems and solutions. Our chief executive officer was identified as the chief operating decision maker (“CODM”). All of the company’s activities are interrelated, and each activity is dependent upon and supportive of the other, including product development, supply chain and back-office support services. In addition, all significant operating decisions, by management and the Board, are largely based upon the analysis of Xerox Holdings and Xerox on a total company basis, including assessments related to our incentive compensation plans.

Geographic Area Data

Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is as follows:



	Revenues						Long-Lived Assets ⁽¹⁾
	Year Ended December 31,						As of December 31,
	2019		2018		2017		2019		2018
United States	$	5,429	$	5,610	$	5,790	$	769	$	670
Europe	2,326		2,625		2,697		305		277
Other areas	1,311		1,427		1,504		157		147
Total	$	9,066	$	9,662	$	9,991	$	1,231	$	1,094

_____________

(1)

Divestitures (Tables)

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Summarized financial information - discontinued operations

Summarized financial information for our Discontinued Operations is as follows:



	Year Ended December 31,
	2019		2018		2017
Revenue	$	79	$	168	$	274

Income from operations⁽¹⁾	$	176	$	74	$	138
Gain on disposal	629		—		—
Income before income taxes	805		74		138
Income tax expense⁽¹⁾	95		10		1
Income from discontinued operations, net of tax	710		64		137
Income from discontinued operations attributable to noncontrolling interests, net of tax	5		9		8
Income from discontinued operations, attributable to Xerox, net of tax⁽¹⁾	$	705	$	55	$	129

_____________


(1)	2017 Income from discontinued operations, net of tax, attributable to Xerox includes $3 related to the BPO separation, that includes a loss from operations of $(9) and income tax benefit of $12 with both amounts primarily related to changes in estimated amounts recorded in 2016.

The following is a summary of selected financial information for our Discontinued Operations:



	Year Ended December 31,
	2019		2018		2017
Cost and Expenses:
Cost of revenues	$	44	$	110	$	218
Other expenses	6		9		20
Total Costs and Expenses	$	50	$	119	$	238
Selected amounts included in Costs and Expenses:
Depreciation and amortization	$	—	$	—	$	1
Restructuring and related costs	—		1		—
Other:
Equity in net income of FX	$	147	$	25	$	102
Net income attributable to noncontrolling interest - XIP	5		9		8
Capital expenditures	—		—		—



	At Date of Sale		December 31, 2018
Assets
Cash and cash equivalents	$	1	$	3
Accounts receivable, net	3		6
Inventories	5		7
Other current assets	—		3
Total current assets	9		19
Land, building and equipment, net	1		1
Goodwill	9		9
Other long-term assets	1,471		1,342
Total Assets of discontinued operations	$	1,490	$	1,371

Liabilities
Accounts payable	$	8	$	18
Accrued compensation and benefits costs	1		1
Accrued expenses and other current liabilities	2		2
Total current liabilities	11		21
Other long-term liabilities	1		—
Total Liabilities of discontinued operations	$	12	$	21