XML 16 R6.htm IDEA: XBRL DOCUMENT
v3.5.0.2

Basis of Presentation | 9 Months Ended
--- | ---
Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Basis of Presentation | Basis of Presentation The Proposed Transaction On January 29, 2016, Xerox Corporation (Xerox or Parent) announced plans for the complete legal and structural separation ("Spin-Off") of the businesses constituting Xerox's Business Processing Outsourcing business and related operations (the "BPS Business") from Xerox. To effect the separation, Xerox will first undertake a series of internal transactions, following which Conduent Incorporated ("Conduent") will hold, directly or through its subsidiaries, the BPS Business. The separation will be completed by way of a pro rata distribution of Conduent Incorporated shares held by Xerox to Xerox's shareholders. The Spin-Off will be completed by way of a pro rata dividend on December 31, 2016 of shares of Conduent common stock held by Xerox to its shareholders as outstanding shares of common stock of Conduent and Conduent will operate as an independent publicly-traded company. In these Condensed Combined Financial Statements, unless the context otherwise requires:
• | "We," "our" and "us" refer to Xerox's Business Processing Outsourcing business and related operations, and
• | "Spin-Off" refers to the transaction in which we will be separated from Xerox.
Completion of the Spin-Off is subject to the satisfaction or waiver of a number of conditions. In addition, Xerox has the right not to complete the Spin-Off if, at any time, Xerox’s board of directors determines, in its sole and absolute discretion, that the Spin-Off is not in the best interest of Xerox or its shareholders, or is otherwise not advisable. Basis of Presentation and Principles of Combination The Condensed Combined Financial Statements of the BPS Business have been derived from the Consolidated Financial Statements and accounting records of Xerox as if the BPS Business operated on a standalone basis during the periods presented and were prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and pursuant to the rules and regulations of the SEC. Historically, the BPS Business consisted of the Business Processing Outsourcing Operating segment within Xerox's reportable Services segment and did not operate as a separate, standalone company. Accordingly, its financial position and the related results of operations, cash flows and changes in equity have been reported in Xerox's Consolidated Financial Statements. We have prepared the unaudited Condensed Combined Financial Statements in accordance with the accounting policies described in our audited 2015 Combined Financial Statements, contained in the Company's Registration Statement on Form 10 filed with the SEC, on June 30, 2016, as amended and the interim reporting requirements of U.S. GAAP. Accordingly, certain information and note disclosures normally included in our annual combined financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. You should read these Condensed Combined Financial Statements in conjunction with the 2015 Combined Financial Statements contained in our Registration Statement on Form 10. In the opinion of management, all adjustments which are necessary for a fair statement of financial position, operating results and cash flows for the interim periods presented have been made. These adjustments consist of normal recurring items. Interim results of operations are not necessarily indicative of the results of the full year. As the separate legal entities and divisions that make up the BPS Business were not historically held by a single legal entity, Total Net Parent Equity is shown in lieu of shareholder's equity in these Condensed Combined Financial Statements. Balances between the BPS Business and Xerox that were not historically settled in cash are included in Net Parent Investment. Net Parent Investment represents Xerox's interest in the recorded assets of the BPS Business and represents the cumulative investment by Xerox in the BPS Business through the dates presented, inclusive of operating results. The Condensed Combined Financial Statements include the historical basis of assets, liabilities, revenues, and expenses of the individual businesses of Xerox's historical BPS Business including the joint ventures and partnerships over which the BPS Business has a controlling financial interest. The BPS Business uses the equity method to account for investments in business entities that it does not control if it is otherwise able to exercise significant influence over the entities operating and financial policies (generally 20% to 50% ownership). The Condensed Combined Financial Statements include certain assets and liabilities that are held by Xerox that are specifically identifiable or otherwise attributable to the BPS Business. All intercompany transactions and balances within the BPS Business have been eliminated. Cash is managed centrally through bank accounts controlled and maintained by Xerox. Accordingly, cash and cash equivalents held by Xerox at the corporate level were not attributable to the BPS Business for any of the periods presented. Only cash amounts specifically attributable to the BPS Business are reflected in the Condensed Combined Balance Sheets. Transfers of cash, both to and from Xerox's centralized cash management system, are reflected as a component of Net Parent Investment in the Condensed Combined Balance Sheets and as a financing activity on the accompanying Condensed Combined Statements of Cash Flows. Historically, the BPS Business received or provided funding as part of Xerox's centralized treasury program. Third-party debt obligations of Xerox and the corresponding financing costs related to those debt obligations, specifically those that relate to senior notes, term loans, commercial paper obligations and revolving credit facilities, have not been attributed to the BPS Business, as the BPS Business was not the legal obligor on the debt. The only third-party debt obligations included in these Condensed Combined Financial Statements are those for which the legal obligor is a legal entity within the BPS Business. During the periods presented, the BPS Business functioned as part of the larger group of companies controlled by Xerox. Accordingly, Xerox performed certain corporate overhead functions for the BPS Business. Therefore, certain corporate costs, including compensation costs for corporate employees supporting the BPS Business, have been allocated from Xerox. These allocated costs are for corporate functions including, but not limited to, senior management, legal, human resources, finance and accounting, treasury, information technology, marketing and communications, internal audit and other shared services, which are not provided at the BPS Business level. Where possible, these costs were allocated based on direct usage, with the remainder allocated on a basis of cost, headcount, or other measures we have determined as reasonable. The Condensed Combined Financial Statements do not necessarily include all the expenses that would have been incurred or held by the BPS Business had it been a separate, standalone company. We expect to incur additional expenses, as well as gain incremental productivity as a separate, standalone publicly-traded company. It is not practicable to estimate actual costs that would have been incurred had the BPS Business been a separate standalone company during the periods presented. Allocations for management costs and corporate support services provided to the BPS Business totaled $41 and $125 for the three and nine months ended September 30, 2016, respectively, and $40 and $127 for the three and nine months ended September 30, 2015, respectively. The management of the BPS Business believes the assumptions underlying the Condensed Combined Financial Statements, including the assumptions regarding the allocated expenses, reasonably reflect the utilization of services provided to or the benefit received by the BPS Business during the periods presented. Nevertheless, the Condensed Combined Financial Statements may not be indicative of the BPS Business's future performance, and do not necessarily include all of the actual expenses that would have been incurred by the BPS Business and may not reflect the results of operations, financial position, and cash flows of the BPS Business had the BPS Business been a separate, standalone company during the periods presented. Operations of the BPS Business are included in the consolidated U.S. federal, and certain state and local and foreign income tax returns filed by Xerox, where applicable. The BPS Business also files certain separate state and local and foreign income tax returns. Income tax expense and other income tax related information contained in the Condensed Combined Financial Statements are presented on a separate return basis as if the BPS Business filed its own tax returns. The income taxes of the BPS Business, as presented in the Condensed Combined Financial Statements, may not be indicative of the income taxes that the BPS Business will generate in the future. In jurisdictions where the BPS Business has been included in the tax returns filed by Xerox, any income taxes payable resulting from the related income tax provisions have been reflected in the balance sheet within "Net Parent Investment." For convenience and ease of reference, we refer to the financial statement caption “Income (Loss) before Income Taxes” as “pre-tax income (loss)” throughout the Notes to the Condensed Combined Financial Statements. During the 2016 second quarter closing process, we determined that the first quarter 2016 income tax benefit of $25 should have been $6 higher. This additional income tax benefit was adjusted for and included in the six month results ended June 30, 2016 and the nine month results ended September 30, 2016. We will revise the first quarter 2016 results in future filings to reflect this adjustment. The Company concluded that this item was not material to the condensed combined financial statements for the three months ended March 31, 2016.

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35735333&loc=d3e288-107754 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51655414&loc=d3e18780-107790 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 272 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6373374&loc=d3e70478-108055 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=18733093&loc=d3e5614-111684 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755 + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration