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Segment Information | 6 Months Ended
--- | ---
Jun. 30, 2022
Segment Reporting [Abstract] |
Segment Information | Segment Information Effective January 1, 2022, the company changed the grouping of certain immaterial revenue streams. As a result, certain prior period segment revenue as well as the related cost of sales amounts have been reclassified to be comparable to the current period’s presentation. In addition, during the second quarter of 2022, the company renamed its Cloud and Infrastructure Solutions segment as Cloud, Applications and Infrastructure Solutions to better represent the nature of the segment’s operations. There was no change to the composition of the segment or its historical results. The company’s reportable segments are as follows: •Digital Workplace Solutions (DWS), which provides modern and traditional workplace solutions; •Cloud, Applications and Infrastructure Solutions (CA&I), which provides digital platform, applications, and infrastructure solutions; and •Enterprise Computing Solutions (ECS), which provides solutions that harness secure, continuous high-intensity computing and enable digital services through software-defined operating environments. The accounting policies of each segment are the same as those followed by the company as a whole. Intersegment sales and transfers are priced as if the sales or transfers were to third parties. Accordingly, the ECS segment records intersegment revenue and manufacturing profit on hardware and software shipments to customers under contracts of other segments. These segments, in turn, record customer revenue and marketing profits on such shipments of company hardware and software to customers. In the company’s consolidated statements of income (loss), the manufacturing costs of products sourced from the ECS segment and sold to other segments’ customers are reported in cost of revenue for these other segments. Also included in the ECS segment’s sales and gross profit are sales of hardware and software sold to other segments for internal use in their engagements. The amount of such profit included in gross profit of the ECS segment for the three and six months ended June 30, 2021 was $0.4 million and $1.1 million, respectively. The sales and profit on these transactions are eliminated in consolidation. The company evaluates segment performance based on gross profit exclusive of the service cost component of postretirement income or expense, restructuring charges, amortization of purchased intangibles and unusual and nonrecurring items, which are included in other gross profit. A summary of the company’s operations by segment is presented below:
|  | Total Segments |  | DWS |  | CA&I |  | ECS
Three Months Ended June 30, 2022 |  |  |  |  |  |  |  |
Customer revenue |  | $ | 443.1 |  |  | $ | 127.2 |  |  | $ | 130.1 |  |  | $ | 185.8 |
Intersegment |  | — |  |  | — |  |  | — |  |  | — |
Total revenue |  | $ | 443.1 |  |  | $ | 127.2 |  |  | $ | 130.1 |  |  | $ | 185.8 |
Gross profit |  | $ | 146.6 |  |  | $ | 16.5 |  |  | $ | 7.1 |  |  | $ | 123.0 |
Three Months Ended June 30, 2021 |  |  |  |  |  |  |  |
Customer revenue |  | $ | 441.6 |  |  | $ | 148.4 |  |  | $ | 121.7 |  |  | $ | 171.5 |
Intersegment |  | 0.4 |  |  | — |  |  | — |  |  | 0.4 |
Total revenue |  | $ | 442.0 |  |  | $ | 148.4 |  |  | $ | 121.7 |  |  | $ | 171.9 |
Gross profit |  | $ | 142.3 |  |  | $ | 22.9 |  |  | $ | 13.5 |  |  | $ | 105.9 |
|  | Total Segments |  | DWS |  | CA&I |  | ECS
Six Months Ended June 30, 2022 |  |  |  |  |  |  |  |
Customer revenue |  | $ | 817.6 |  |  | $ | 252.0 |  |  | $ | 259.2 |  |  | $ | 306.4 |
Intersegment |  | — |  |  | — |  |  | — |  |  | — |
Total revenue |  | $ | 817.6 |  |  | $ | 252.0 |  |  | $ | 259.2 |  |  | $ | 306.4 |
Gross profit |  | $ | 232.4 |  |  | $ | 32.5 |  |  | $ | 14.1 |  |  | $ | 185.8 |
Six Months Ended June 30, 2021 |  |  |  |  |  |  |  |
Customer revenue |  | $ | 874.5 |  |  | $ | 291.3 |  |  | $ | 242.4 |  |  | $ | 340.8 |
Intersegment |  | 1.4 |  |  | — |  |  | — |  |  | 1.4 |
Total revenue |  | $ | 875.9 |  |  | $ | 291.3 |  |  | $ | 242.4 |  |  | $ | 342.2 |
Gross profit |  | $ | 276.1 |  |  | $ | 42.0 |  |  | $ | 23.4 |  |  | $ | 210.7 |
Presented below is a reconciliation of total segment revenue to total consolidated revenue:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2022 |  | 2021 |  | 2022 |  | 2021
Total segment revenue |  | $ | 443.1 |  |  | $ | 442.0 |  |  | $ | 817.6 |  |  | $ | 875.9 |
Other revenue |  | 71.9 |  |  | 75.7 |  |  | 144.1 |  |  | 152.6 |
Elimination of intercompany revenue |  | — |  |  | (0.4) |  |  | — |  |  | (1.4) |
Total consolidated revenue |  | $ | 515.0 |  |  | $ | 517.3 |  |  | $ | 961.7 |  |  | $ | 1,027.1 |
Presented below is a reconciliation of total segment gross profit to consolidated loss before income taxes:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2022 |  | 2021 |  | 2022 |  | 2021
Total segment gross profit |  | $ | 146.6 |  |  | $ | 142.3 |  |  | $ | 232.4 |  |  | $ | 276.1 |
Other gross profit |  | 1.5 |  |  | (0.1) |  |  | 3.1 |  |  | 5.3 |
Total gross profit |  | 148.1 |  |  | 142.2 |  |  | 235.5 |  |  | 281.4 |
Selling, general and administrative expense |  | (109.6) |  |  | (94.6) |  |  | (214.0) |  |  | (184.6) |
Research and development expense |  | (4.8) |  |  | (6.8) |  |  | (11.3) |  |  | (12.4) |
Interest expense |  | (8.3) |  |  | (8.4) |  |  | (16.7) |  |  | (18.5) |
Other (expense), net |  | (21.9) |  |  | (227.8) |  |  | (42.9) |  |  | (410.4) |
Total earnings (loss) before income taxes |  | $ | 3.5 |  |  | $ | (195.4) |  |  | $ | (49.4) |  |  | $ | (344.5) |
Other revenue and other gross profit are comprised of an aggregation of a number of immaterial business activities that principally provide for the management of processes and functions for clients in select industries, helping them improve performance and reduce costs. Geographic information about the company’s revenue, which is principally based on location of the selling organization, is presented below:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2022 |  | 2021 |  | 2022 |  | 2021
United States |  | $ | 235.6 |  |  | $ | 201.6 |  |  | $ | 434.6 |  |  | $ | 436.1 |
United Kingdom |  | 69.8 |  |  | 104.1 |  |  | 122.7 |  |  | 172.1 |
Other foreign |  | 209.6 |  |  | 211.6 |  |  | 404.4 |  |  | 418.9 |
Total |  | $ | 515.0 |  |  | $ | 517.3 |  |  | $ | 961.7 |  |  | $ | 1,027.1 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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