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Form 8-K XEROX CORP For: Jan 23

January 23, 2015 7:56 AM EST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section�13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): January�23, 2015

LOGO

XEROX CORPORATION

(Exact name of registrant as specified in its charter)

New York 001-04471 16-0468020

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

P. O. Box 4505

45 Glover Avenue

Norwalk, Connecticut

06856-4505

(Address of principal executive offices) (Zip Code)

Registrant�s telephone number, including area code: (203)�968-3000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item�2.02. Results of Operations and Financial Condition.

As Registrant announced on December�18, 2014, with the planned sale of its Information Technology Outsourcing (�ITO�) business to Atos SE, and having met applicable accounting requirements, Registrant will be reporting its ITO business as a discontinued operation beginning with its fourth quarter 2014 earnings report. Registrant plans to release its fourth quarter 2014 financial results on January�30, 2015. To assist investors in evaluating those financial results, Registrant is furnishing this Current Report on Form 8-K in advance of that release in order to provide revised historical quarterly financial information for 2013 and 2014 (through third quarter 2014) that reflects the presentation of its ITO business as a discontinued operation. This information is unaudited and, although not expected, may be subject to revision. This revised historical quarterly information is attached hereto as Exhibit 99.1 and is also available on Registrant�s website at: www.xerox.com/investor.

Exhibit 99.1 is furnished herewith and shall not be deemed �filed� with the Commission for purposes of Section�18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended.

Item�9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit�No.

��

Description

99.1 �� Registrant�s revised historical quarterly financial information for 2013 and 2014 (through third quarter 2014)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly authorized this Report to be signed on its behalf by the undersigned duly authorized.

Date: January�23, 2015

XEROX CORPORATION
By:

/s/ Joseph H. Mancini, Jr.

Joseph H. Mancini, Jr.
Vice President and Chief Accounting Officer


EXHIBIT INDEX

Exhibit�No.

��

Description

99.1 �� Registrant�s revised historical quarterly financial information for 2013 and 2014 (through third quarter 2014)
Xerox Financial Information �� Exhibit 99.1
(unaudited) ��

(in millions, except per-share data)

2013 (Revised)(1) 2014 (Revised)(1)
Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q3�YTD

Revenues

Sales

$ 1,279 �� $ 1,432 �� $ 1,352 �� $ 1,519 �� $ 5,582 �� $ 1,257 �� $ 1,342 �� $ 1,275 �� $ 3,874 ��

Outsourcing, maintenance and rentals

3,460 �� 3,497 �� 3,415 �� 3,569 �� 13,941 �� 3,414 �� 3,501 �� 3,424 �� 10,339 ��

Financing

118 �� 113 �� 133 �� 119 �� 483 �� 100 �� 98 �� 96 �� 294 ��

Total Revenues

4,857 �� 5,042 �� 4,900 �� 5,207 �� 20,006 �� 4,771 �� 4,941 �� 4,795 �� 14,507 ��

Cost of Revenue

Cost of sales

804 �� 915 �� 851 �� 980 �� 3,550 �� 778 �� 832 �� 774 �� 2,384 ��

Cost of outsourcing, maintenance and rentals

2,461 �� 2,429 �� 2,395 �� 2,523 �� 9,808 �� 2,454 �� 2,488 �� 2,444 �� 7,386 ��

Cost of financing

43 �� 42 �� 40 �� 38 �� 163 �� 36 �� 36 �� 35 �� 107 ��

Total Cost of Revenue

3,308 �� 3,386 �� 3,286 �� 3,541 �� 13,521 �� 3,268 �� 3,356 �� 3,253 �� 9,877 ��

Gross Profit

Sales gross profit

475 �� 517 �� 501 �� 539 �� 2,032 �� 479 �� 510 �� 501 �� 1,490 ��

Outsourcing, maintenance and rentals gross profit

999 �� 1,068 �� 1,020 �� 1,046 �� 4,133 �� 960 �� 1,013 �� 980 �� 2,953 ��

Financing gross profit

75 �� 71 �� 93 �� 81 �� 320 �� 64 �� 62 �� 61 �� 187 ��

Gross Profit

1,549 �� 1,656 �� 1,614 �� 1,666 �� 6,485 �� 1,503 �� 1,585 �� 1,542 �� 4,630 ��

Research, development�& engineering

155 �� 149 �� 146 �� 153 �� 603 �� 145 �� 143 �� 139 �� 427 ��

Bad debt expense

24 �� 33 �� 27 �� 36 �� 120 �� 14 �� 22 �� 18 �� 54 ��

Selling, administrative and general exp. (excl. bad debts)

1,000 �� 992 �� 974 �� 987 �� 3,953 �� 931 �� 937 �� 924 �� 2,792 ��

Total selling, administrative and general exp.

1,024 �� 1,025 �� 1,001 �� 1,023 �� 4,073 �� 945 �� 959 �� 942 �� 2,846 ��

Non-financing interest expense

61 �� 61 �� 59 �� 59 �� 240 �� 63 �� 60 �� 56 �� 179 ��

Aggregate exchange (gains) / losses

(4 )� (3 )� 1 �� (1 )� (7 )� 1 �� (1 )� ��� �� ��� ��

All other, net

(41 )� 1 �� (22 )� (25 )� (87 )� (25 )� 6 �� 15 �� (4 )�

Total Other, net

16 �� 59 �� 38 �� 33 �� 146 �� 39 �� 65 �� 71 �� 175 ��

Restructuring and asset impairment charges

(8 )� 33 �� 35 �� 55 �� 115 �� 26 �� 39 �� 27 �� 92 ��

Amortization of intangible assets

76 �� 76 �� 77 �� 76 �� 305 �� 77 �� 78 �� 77 �� 232 ��

Total Costs and Expenses

4,571 �� 4,728 �� 4,583 �� 4,881 �� 18,763 �� 4,500 �� 4,640 �� 4,509 �� 13,649 ��

Income before Income Taxes�& Equity Income

286 �� 314 �� 317 �� 326 �� 1,243 �� 271 �� 301 �� 286 �� 858 ��

Income Taxes

46 �� 61 �� 79 �� 67 �� 253 �� 42 �� 73 �� 66 �� 181 ��

Equity in Net Income of Unconsol. Affil.

47 �� 36 �� 43 �� 43 �� 169 �� 42 �� 33 �� 44 �� 119 ��

Income from Continuing Operations

287 �� 289 �� 281 �� 302 �� 1,159 �� 271 �� 261 �� 264 �� 796 ��

Income (Loss) from Discontinued Operations, net of tax

13 �� (12 )� 10 �� 9 �� 20 �� 15 �� 11 �� 8 �� 34 ��

Net Income

300 �� 277 �� 291 �� 311 �� 1,179 �� 286 �� 272 �� 272 �� 830 ��

Less: Net Income attributable to Noncontrolling Interests

4 �� 6 �� 5 �� 5 �� 20 �� 5 �� 6 �� 6 �� 17 ��

Net Income attributable to Xerox Corporation

$ 296 �� $ 271 �� $ 286 �� $ 306 �� $ 1,159 �� $ 281 �� $ 266 �� $ 266 �� $ 813 ��

Adjusted Average Shares

- Basic

1,225 �� 1,230 �� 1,236 �� 1,214 �� 1,225 �� 1,179 �� 1,161 �� 1,149 �� 1,163 ��

- Diluted

1,280 �� 1,287 �� 1,286 �� 1,261 �� 1,274 �� 1,225 �� 1,208 �� 1,192 �� 1,208 ��

Earnings Per Share

- Basic:

Continuing Operations

0.23 �� 0.23 �� 0.22 �� 0.24 �� 0.91 �� 0.22 �� 0.21 �� 0.22 �� 0.65 ��

Discontinued Operations

0.01 �� (0.01 )� 0.01 �� 0.01 �� 0.02 �� 0.01 �� 0.01 �� 0.01 �� 0.03 ��

Total Basic Earnings per Share

0.24 �� 0.22 �� 0.23 �� 0.25 �� 0.93 �� 0.23 �� 0.22 �� 0.23 �� 0.68 ��

- Diluted:

Continuing Operations

0.22 �� 0.22 �� 0.21 �� 0.23 �� 0.89 �� 0.22 �� 0.21 �� 0.21 �� 0.64 ��

Discontinued Operations

0.01 �� (0.01 )� 0.01 �� 0.01 �� 0.02 �� 0.01 �� 0.01 �� 0.01 �� 0.03 ��

Total Diluted Earnings per Share

0.23 �� 0.21 �� 0.22 �� 0.24 �� 0.91 �� 0.23 �� 0.22 �� 0.22 �� 0.67 ��

- Adjusted:

Adjusted Net Income

330 �� 330 �� 324 �� 344 �� 1,328 �� 314 �� 303 �� 306 �� 923 ��

Adjusted Earnings per Share(2)

0.26 �� 0.26 �� 0.25 �� 0.27 �� 1.04 �� 0.26 �� 0.25 �� 0.26 �� 0.76 ��

Intangible Amortization(2)

0.04 �� 0.04 �� 0.04 �� 0.04 �� 0.15 �� 0.04 �� 0.04 �� 0.05 �� 0.12 ��

Key Ratios:

Gross Margins

- Sales 37.1 %� 36.1 %� 37.1 %� 35.5 %� 36.4 %� 38.1 %� 38.0 %� 39.3 %� 38.5 %�

- Outsourcing/Maintenance/Rentals

28.9 %� 30.5 %� 29.9 %� 29.3 %� 29.6 %� 28.1 %� 28.9 %� 28.6 %� 28.6 %�
- Financing 63.6 %� 62.8 %� 69.9 %� 68.1 %� 66.3 %� 64.0 %� 63.3 %� 63.5 %� 63.6 %�
- Total 31.9 %� 32.8 %� 32.9 %� 32.0 %� 32.4 %� 31.5 %� 32.1 %� 32.2 %� 31.9 %�

SAG as a % of Revenue

21.1 %� 20.3 %� 20.4 %� 19.6 %� 20.4 %� 19.8 %� 19.4 %� 19.6 %� 19.6 %�

Tax Rate

16.1 %� 19.4 %� 24.9 %� 20.6 %� 20.4 %� 15.5 %� 24.3 %� 23.1 %� 21.1 %�

Other Data:

Amortization of purchased intangibles (after taxes)

$ 47 �� $ 47 �� $ 48 �� $ 47 �� $ 189 �� $ 48 �� $ 48 �� $ 48 �� $ 144 ��

(1) Revised for the reclassification of the ITO business from Services segment to discontinued operations.
(2) Adjusted Earnings per Share is a non-GAAP measure and represents Diluted EPS from Continuing Operations before the after-tax amortization of intangible assets.


Xerox Corporation Business Segment Performance

(unaudited)

(in millions)

�� 2013 (Revised)(1) 2014 (Revised)(1)
�� Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q3�YTD

Revenues

��

Services

�� $ 2,584 �� $ 2,613 �� $ 2,596 �� $ 2,686 �� $ 10,479 �� $ 2,585 �� $ 2,651 �� $ 2,623 �� $ 7,859 ��

Document�Technology

�� 2,135 �� 2,263 �� 2,159 �� 2,351 �� 8,908 �� 2,044 �� 2,126 �� 2,029 �� 6,199 ��

Other

�� 138 �� 166 �� 145 �� 170 �� 619 �� 142 �� 164 �� 143 �� 449 ��
��

Total Revenues

�� $ 4,857 �� $ 5,042 �� $ 4,900 �� $ 5,207 �� $ 20,006 �� $ 4,771 �� $ 4,941 �� $ 4,795 �� $ 14,507 ��
��

Segment Profit (Loss)

��

Services

�� $ 250 �� $ 276 �� $ 268 �� $ 261 �� $ 1,055 �� $ 222 �� $ 226 �� $ 240 �� $ 688 ��

Document Technology

�� 186 �� 245 �� 260 �� 273 �� 964 �� 249 �� 306 �� 284 �� 839 ��

Other

�� (68 )� (61 )� (54 )� (34 )� (217 )� (50 )� (75 )� (82 )� (207 )�
��

Segment Profit�(Loss)

�� $ 368 �� $ 460 �� $ 474 �� $ 500 �� $ 1,802 �� $ 421 �� $ 457 �� $ 442 �� $ 1,320 ��
��

Segment Margin

��

Services

�� 9.7 %� 10.6 %� 10.3 %� 9.7 %� 10.1 %� 8.6 %� 8.5 %� 9.1 %� 8.8 %�

Document Technology

�� 8.7 %� 10.8 %� 12.0 %� 11.6 %� 10.8 %� 12.2 %� 14.4 %� 14.0 %� 13.5 %�

Other

�� (49.3 %)� (36.7 %)� (37.2 %)� (20.0 %)� (35.1 %)� (35.2 %)� (45.7 %)� (57.3 %)� (46.1 %)�
��

Segment Margin

�� 7.6 %� 9.1 %� 9.7 %� 9.6 %� 9.0 %� 8.8 %� 9.2 %� 9.2 %� 9.1 %�
��

(1) Revised for the reclassification of the ITO business from Services segment to discontinued operations. Segment profit for our other segments, Document Technology and Other, were impacted by minor reallocation of expenses as well as rounding.


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