Xerox 2014 Annual Report Download - page 91

as the percentage reduction in the projected benefit obligation due to the settlement of the participant's vested
benefit.
Refer to Note 16 - Employee Benefit Plans for further information regarding our Pension and Post-Retirement Benefit
Obligations.
Foreign Currency Translation and Re-measurement
The functional currency for most 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. A combination of current and historical exchange rates is used in re-measuring the local currency
transactions of these subsidiaries and the resulting exchange adjustments are recorded in Currency (gains) and
losses within Other expenses, net together with other foreign currency remeasurments.
Note 2 – Segment Reporting
Our reportable segments are aligned with how we manage the business and view the markets we serve. We report
our financial performance based on the following two primary reportable segments – Services and Document
Technology. Our Services segment operations involve the delivery of business process and document outsourcing
services for a broad range of customers from small businesses to large global enterprises.
Our Document Technology segment includes the sale and support of a broad range of document systems from
entry level to high-end.
The Services segment is comprised of two outsourcing service offerings:
• Business Process Outsourcing (BPO)
• Document Outsourcing (which includes Managed Print Services) (DO)
Business process outsourcing services include service arrangements where we manage a customer's business
activity or process. We provide multi-industry offerings such as customer care, transaction processing, finance and
accounting, and human resources, as well as industry focused offerings in areas such as healthcare, transportation,
financial services, retail and telecommunications. Document outsourcing services include service arrangements that
allow customers to streamline, simplify and digitize their document-intensive business processes through
automation and deployment of software applications and tools and the management of their printing needs.
Document outsourcing also includes revenues from our partner print services offerings.
As discussed in Note 4 - Divestitures, in December 2014 we announced an agreement to sell our Information
Technology Outsourcing (ITO) business to Atos; the sale is expected to close in the first half of 2015. As a result of
the pending sale and having met applicable accounting requirements, we reported the ITO business as a
discontinued operation and reclassified their results from the Services segment to Discontinued Operations. All prior
periods have been reclassified to conform to this presentation.
Our Document Technology segment includes the sale of document systems and supplies, provision of technical
service and financing of products. Our product groupings range from:
•“Entry,” which includes A4 devices and desktop printers; to
•“Mid-range,” which includes A3 devices that generally serve workgroup environments in mid to large
enterprises and includes products that fall into the following market categories: Color 41+ ppm priced at less
than $100K and Light Production 91+ ppm priced at less than $100K; to
•“High-end,” which includes production printing and publishing systems that generally serve the graphic
communications marketplace and large enterprises.
Customers range from small and mid-sized businesses to large enterprises. Customers also include graphic
communication enterprises as well as channel partners including distributors and resellers. Segment revenues
reflect the sale of document systems and supplies, technical services and product financing.
The segment classified as Other includes several units, none of which meet the thresholds for separate segment
reporting. This group includes paper sales in our developing market countries, Wide Format Systems, licensing
revenues, GIS network integration solutions and electronic presentation systems and non-allocated corporate items
including non-financing interest, as well as other items included in Other expenses, net.
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