Xerox 2014 Annual Report Download - page 104

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Depreciation expense and operating lease rent expense were as follows:
Year Ended December 31,
2014 2013 2012
Depreciation expense (1) $324 $332 $354
Operating lease rent expense(1) 560 513 461
___________
(1) Excludes amounts related to our ITO business which is held for sale and reported as a discontinued operation at December 31, 2014. Refer
to Note 4 - Divestitures for additional information regarding this pending sale.
We lease buildings and equipment, substantially all of which are accounted for as operating leases. Capital leased
assets were approximately $180 and $150 at December 31, 2014 and 2013, respectively. Capital lease assets at
December 31, 2014 includes approximately $75 related to our ITO business which is held for sale and being
reported as a discontinued operation at December 31, 2014. Refer to Note 4 - Divestitures for additional information
regarding this pending sale.
Future minimum operating lease commitments that have initial or remaining non-cancelable lease terms in excess of
one year at December 31, 2014 were as follows:
2015 2016 2017 2018 2019 Thereafter
Continuing operations $ 469 $ 347 $170 $104 $79$ 57
Discontinued operations (1) 117 43 18 8 6—
Minimum operating lease commitments $ 586 $ 390 $188 $112 $85$ 57
___________
(1) Reflects lease commitments related to our ITO business which is held for sale and reported as a discontinued operation at December 31,
2014. Refer to Note 4 - Divestitures for additional information regarding this pending sale.
Internal Use and Product Software
Year Ended December 31,
Additions to: 2014 2013 2012
Internal use software (1) $82$77$
110
Product software 23 28 107
___________
(1) Excludes amounts related to our ITO business which is held for sale and reported as a discontinued operation at December 31, 2014. Refer
to Note 4 - Divestitures for additional information regarding this pending sale.
December 31,
Capitalized costs, net: 2014 2013
Internal use software (1) $454 $506
Product software 307 343
___________
(1) Internal use software at December 31, 2014 includes $20 related to our ITO business which is held for sale and being reported as a
discontinued operation at December 31, 2014. Refer to Note 4 - Divestitures for additional information regarding this pending sale.
Useful lives of our internal use and product software generally vary from three to ten years.
Included within product software at December 31, 2014 is approximately $250 of capitalized costs associated with
significant software system platforms developed for use in certain of our government services businesses. We
regularly review these software system platforms for impairment. Our impairment reviews for 2014 and 2013
indicated that the costs would be recoverable from estimated future operating profits; however, those future
operating profits are heavily dependent on our ability to successfully complete existing contracts as well as obtain
future contracts.
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