Xerox 2002 Annual Report Download

Download and view the complete annual report

Please find the complete 2002 Xerox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

Annual Report 2002
Xerox Annual Report 2002

Table of contents

  • Page 1
    Annual Report 2002

  • Page 2
    ...in operating cash ï¬,ow • Implemented actions under the Turnaround Program which will reduce cost base by $1.7 billion • Brought 17 new products to market • Together with Fuji Xerox, awarded 889 U.S. patents putting us in top ten American companies • Launched Xerox Lean Six Sigma, a powerful...

  • Page 3
    ... the last five quarters. That's a very encouraging trend and a key part of our strategy. Equipment sales not only add revenue today, they add to our profitable post sales revenue stream tomorrow. We said we would improve our gross margins to the high '30s and we exceeded our commitment. Our gross...

  • Page 4
    ... we would drive selling, administrative and general (SAG) costs down and we have. We reduced SAG costs by six percent last year and implemented actions under the Turnaround Program which will reduce our total cost base by $1.7 billion. We said we would return Xerox to full-year profitability and...

  • Page 5
    ...as digital production printing, color, high value solutions for the office and services. Improving Gross Margins (Percent) 42.4 37.4 38.2 0 2000 2001 2002 Our Vision For The Future If you think of Xerox as a world leader in office products like copiers and printers, you are only half-right. To...

  • Page 6
    ..., these business leaders are turning to Xerox for help: • That's why Bank of America asked Xerox to manage its ï¬,eet of 63 hundred digital multifunction devices and two light lens copiers thousand light-lens copiers - -a a three-year three-year contract contract worth worth over $50 million that...

  • Page 7
    ... a clear and strong Code of Conduct. • We established an Ethics Helpline for our employees and have taken other measures all aimed at making Xerox a role model in ethical behavior. • And, of course, in June we brought Larry Zimmerman on board as new Chief Financial Officer. Going forward...

  • Page 8
    ... competitive technology, to drive costs down, to streamline our business, and to execute against our business model. To ensure that we are best in class in every aspect of our business, we have introduced Xerox Lean Six Sigma - a powerful set of tools that will drive improved results. Our investors...

  • Page 9
    ... Senior Vice President, Production Color Solutions Business Unit Productions Systems Group Business Group Operations Leslie F. Varon Vice President Investor Relations and Corporate Secretary Armando Zagalo de Lima Vice President Senior Vice President and Chief Operating Officer Xerox Europe Lance...

  • Page 10
    ... M. Mulcahy 1 Chairman and Chief Executive Officer Xerox Corporation Stamford, Connecticut N. J. Nicholas, Jr. 2, 4, 5 Investor New York, New York John E. Pepper 2, 3 Chairman of the Executive Committee of the Board The Procter & Gamble Company Cincinnati, Ohio 1 Member of the Executive Committee...

  • Page 11
    ... to Annual Report 10 Management's Discussion and Analysis of Results of Operations and Financial Condition Introduction Financial Overview Application of Critical Accounting Policies Summary of Total Company Results Revenues Revenues by Type Employee Stock Ownership Plan Dividends Gross Margin...

  • Page 12
    ...and information technology spending remained weak, however, our equipment sales and revenue declines moderated, reï¬,ecting the success of our new products launched during the year. Improved gross margins and reduced selling, administrative and general expenses, reï¬,ect benefits from our cost base...

  • Page 13
    ... minimums, which are often expressed in terms of price per page, which we refer to as the "cost per copy." In a typical bundled arrangement, our customer is quoted a fixed minimum monthly payment for (1) the equipment, (2) the associated services and other executory costs and (3) the financing...

  • Page 14
    ... forecasted supply and demand for our various products, product retirement and future product launch plans, end of lease customer behavior, remanufacturing strategies, used equipment markets if any, competition and technological changes. The vast majority of our leases that qualify as sales-type are...

  • Page 15
    ...level of inventories. At this time, management does not believe that anticipated product launches will have a material effect on the recovery of our existing inventory balance. We have a similar accounting policy relating to unguaranteed residual values associated with equipment on lease, which were...

  • Page 16
    ... Used Relating to Restructuring: In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS No. 146"), which addresses financial and reporting for costs...

  • Page 17
    ...a component of cost of sales, cost of service, outsourcing and rentals, research and development expenses and selling, administrative and general expenses in our Consolidated Statements of Income. Pension cost is allocated to these income statement components based on the related employee costs. The...

  • Page 18
    ... millions): Assuming an Expected Rate of Return on Plan Assets of 8.3 percent 0.25% increase in discount rate 0.25% decrease in discount rate Increase/(Decrease) in 2003 Projected Net Periodic Pension Cost $(26) 31 The market performance over the past two years has decreased the value of the assets...

  • Page 19
    ... in the number of printers and copiers at customer locations, primarily in Brazil and Argentina. In addition, approximately 15 percent of the decline was due to the discontinuation of equipment sales and declining supplies sales due to our SOHO exit in the second half of 2001. Approximately 10...

  • Page 20
    ... in Europe, as we reoriented our focus from market share to profitable revenue. Post sale and other revenue consists of service, supplies, paper, rental, facilities management and other revenues derived from the equipment installed at customer locations and the volume of prints and copies that...

  • Page 21
    ... of the equipment. Accordingly, we expect a modest total revenue decline in 2003. Employee Stock Ownership Plan: As more fully discussed in Note 16 to the Consolidated Financial Statements, our Board of Directors reinstated the dividend on our Employee Stock Ownership Plan ("ESOP") in 2002...

  • Page 22
    ...in 2002 is due to improved customer administration, collection practices and credit approval policies, as well as our revenue declines. 2001 provisions were lower than 2000 due to lower equipment sales, partially offset by reserve increases due to the weakened worldwide economy. Bad debt expenses as...

  • Page 23
    ..., as well as general and administrative costs. In addition to these sales, we also entered into a purchase and supply agreement with Flextronics, a global electronics manufacturing services company. Pursuant to the purchase agreement, we sold our operations in Toronto, Canada; Aguascalientes, Mexico...

  • Page 24
    ... Brazil to Flextronics for $167 million. In addition, Flextronics purchased the related inventory, property and equipment. We expect these sales, to a company that specializes in manufacturing as their core competency, will help us reduce manufacturing costs and help effectively manage our inventory...

  • Page 25
    ... common stock and our equity investment in Katun Corporation all in 2002, the sale of our Nordic leasing business in 2001 and the sale of our North American paper product line and a 25 percent interest in ContentGuard in 2000, as well as miscellaneous land, buildings and equipment in all years...

  • Page 26
    ... paid by Fuji Xerox for the Asia/Pacific operations. CPID manufactures and sells color printers, ink and related products and supplies. At that time, the acquisition accelerated us to the number two market position in office color printing, improved our reseller and dealer distribution network...

  • Page 27
    ... 6060 during the second half of 2002. Mid-Range color revenue also increased, fueled by the successful launch of the DocuColor 1632 and DocuColor 2240 midrange printer/copiers in the second half of 2002. 2001 Production revenue declined 7 percent (old basis) from 2000, including an unfavorable one...

  • Page 28
    Office: Office revenues include our family of Document Centre® digital multifunction products, color laser, solid ink and monochrome laser printers, digital and lightlens copiers under 90 pages per minute, and facsimile products sold through direct and indirect sales channels in North America and...

  • Page 29
    ... from licensing revenue. The 2001 Other segment loss of $73 (old basis) reï¬,ects additional ESOP compensation expense necessitated by the elimination of the ESOP dividend of $33 million, higher professional fees related to litigation and SEC issues and related matters of $52 million. 2000 results...

  • Page 30
    ...offset by capital and internal use software spending of $343 million, a $255 million payment related to our funding of trusts to replace Ridge Reinsurance letters of credit, $115 million of payments for the funding of escrow requirements related to the lease contracts transferred to GE, $229 million...

  • Page 31
    ... our inventory balances and spending for on-lease equipment by approximately $480 million. We also had a one-year benefit of approximately $350 million associated with the timing of taxes due on the gain from our sale of half our interest of Fuji Xerox, which we did not have to pay until first...

  • Page 32
    ... of the agreements to which we are parties and (3) the policies and cooperation of the financial institutions we utilize to maintain such cash management practices. In 2000, our operational issues were exacerbated by significant competitive and industry changes, adverse economic conditions, and...

  • Page 33
    ... 2001, we sold our leasing businesses in four Nordic countries to a company now owned by GE and retained interests in certain finance receivables. These sales are part of an agreement under which that company will provide ongoing, exclusive equipment financing to our customers in those countries...

  • Page 34
    ... statement of cash ï¬,ows as "additions to land, buildings and equipment", plus any capital lease obligations incurred; Minimum consolidated net worth ranging from $2.9 billion to $3.1 billion; for this purpose, "consolidated net worth" generally means the sum of the amounts included on our balance...

  • Page 35
    ... we completed an eight-year agreement in the U.S. (the "New U.S. Vendor Financing Agreement"), under which GE Vendor Financial Services, a subsidiary of GE, became our primary equipment financing provider in the U.S., through monthly securitizations of our new lease originations. In addition to the...

  • Page 36
    ... Data Systems Corp. ("EDS") to provide services to us for global mainframe system processing, application maintenance and enhancements, desktop services and help desk support, voice and data network management, and server management. In 2001, we extended the original ten-year contract through...

  • Page 37
    ... of global mainframe system processing, application maintenance and enhancements, desktop services and help desk support, voice and data management) were established when the contract was signed in 1994 based on our actual costs in preceding years. The pricing was modified through comparisons to...

  • Page 38
    ... rates and interest rates that could affect our results of operations and financial condition. Our current below investment-grade credit ratings effectively constrain our ability to fully use derivative contracts as part of our risk management strategy described below, especially with respect to...

  • Page 39
    ...: This Annual Report contains forward-looking statements and information relating to Xerox that are based on our beliefs, as well as assumptions made by and information currently available to us. The words "anticipate," "believe," "estimate," "expect," "intend," "will" and similar expressions, as...

  • Page 40
    ... income Total Revenues Costs and Expenses Cost of sales Cost of service, outsourcing and rentals Equipment financing interest Research and development expenses Selling, administrative and general expenses Restructuring and asset impairment charges Gain on sale of half of interest in Fuji Xerox Gain...

  • Page 41
    ... leases, net Land, buildings and equipment, net Investments in affiliates, at equity Intangible assets, net Goodwill Deferred tax assets, long-term Other long-term assets Total Assets Liabilities and Equity Short-term debt and current portion of long-term debt Accounts payable Accrued compensation...

  • Page 42
    ...-term liabilities Early termination of derivative contracts Other, net Net cash provided by operating activities Cash Flows from Investing Activities: Cost of additions to land, buildings and equipment Proceeds from sales of land, buildings and equipment Cost of additions to internal use software...

  • Page 43
    ... 31, 1999 Net loss Translation adjustments Minimum pension liability, net of tax Unrealized loss on securities Comprehensive loss Stock option and incentive plans Xerox Canada exchangeable stock Convertible securities Cash dividends declared: Common stock ($0.65 per share) Preferred stock ($6.25...

  • Page 44
    ... market, developing, manufacturing, marketing, servicing and financing a complete range of document equipment, software, solutions and services. Liquidity, Financial Flexibility and Funding Plans: We manage our worldwide liquidity using internal cash management practices, which are subject to...

  • Page 45
    ...New Credit Facility generally does not affect our ability to continue to monetize receivables under the agreements with General Electric ("GE") and others. Although we cannot pay cash dividends on our common stock during the term of the New Credit Facility, we can pay cash dividends on our preferred...

  • Page 46
    ... assets Provisions for receivables Provisions for obsolete and excess inventory Depreciation and obsolecence of equipment on operating leases Depreciation of buildings and equipment Amortization of capitalized software Pension benefits - net periodic benefit cost Other post-retirement bene...

  • Page 47
    ...modified Black-Scholes option pricing model, the Costs Associated with Exit or Disposal Activities: In 2002, the FASB issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS No. 146"). This standard requires companies to...

  • Page 48
    ... issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143"). This statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and associated asset retirement costs...

  • Page 49
    ... supplies and income associated with the financing of our equipment sales. Revenue is recognized when earned. More specifically, revenue related to sales of our products and services is recognized as follows: Equipment: Revenues from the sale of equipment, including those from sales-type leases...

  • Page 50
    ...-line basis. Service: Service revenues are derived primarily from maintenance contracts on our equipment sold to customers and are recognized over the term of the contracts. A substantial portion of our products are sold with full service maintenance agreements for which the customer typically pays...

  • Page 51
    ... forecasted supply and demand for our various products, product retirement and future product launch plans, end of lease customer behavior, remanufacturing strategies, used equipment markets if any, competition and technological changes. The vast majority of our leases that qualify as sales-type are...

  • Page 52
    ... value over the term of the lease. Depreciation is computed using principally the straight-line method. Significant improvements are capitalized and maintenance and repairs are expensed. Refer to Notes 6 and 7 for further discussion. Internal-Use Software: We capitalize direct costs incurred during...

  • Page 53
    ... obligations and the net periodic pension and other post-retirement benefit cost is the rate that we use to discount our future anticipated benefit obligations. In estimating this rate, we consider rates of return on high quality fixed-income investments currently available, and expected to be...

  • Page 54
    ... that will be paid to such employees. In addition to these pension related costs, we also incur others such as pension settlements. A pension settlement occurs when we make lump-sum cash payments to plan participants in exchange for their rights to receive pension benefits in the future. We are...

  • Page 55
    ... quarter of 2000, we provided $105, consisting of $71 for severance and related costs and $34 for asset impairments associated with the disposition of Delphax, which supplied high-speed election beam digital printing systems. Over half of these charges related to our Production operating segment...

  • Page 56
    ...depleted our inventory of personal inkjet and xerographic printers, copiers, facsimile machines and multifunction devices which were sold primarily through retail channels to small offices, home offices and personal users (consumers). We continue to provide service, support and supplies, including...

  • Page 57
    ... of the Color Printing and Imaging Division of Tektronix, Inc. ("CPID"). CPID manufactures and sells color printers, ink and related products, and supplies. The original aggregate consideration paid of $925 in cash, including $73 paid directly by Fuji Xerox, was subject to purchase price adjustments...

  • Page 58
    ... electronics manufacturing services company. Under the agreements, Flextronics purchased related inventory, property and equipment. Pursuant to the purchase agreement, we sold our operations in Toronto, Canada; Aguascalientes, Mexico; Penang, Malaysia; Venray, The Netherlands and Resende, Brazil to...

  • Page 59
    ... we completed an eight-year agreement in the U.S. (the "New U.S. Vendor Financing Agreement"), under which GE Vendor Financial Services, a subsidiary of GE, became the primary equipment financing provider in the U.S., through monthly securitizations of our new lease originations. In addition to the...

  • Page 60
    ... Balance Sheet. In May 2002, we launched the Xerox Capital Services ("XCS") venture with GE, under which XCS now manages our customer administration and leasing activities in the U.S., including various financing programs, credit approval, order processing, billing and collections. We account...

  • Page 61
    ... income under leases with non-cancelable terms in excess of one year amounted to $45 at December 31, 2002. Capitalized direct costs associated with developing, purchasing or otherwise acquiring software for internal-use are included in Other long-term assets in our Consolidated Balance Sheets. These...

  • Page 62
    ... 2001, we extended our information technology contract with Electronic Data Systems Corp. ("EDS") for five years through June 30, 2009. Services to be provided under this contract include support of global mainframe system processing, application maintenance, desktop and helpdesk support, voice and...

  • Page 63
    ...our family of Document Centre digital multifunction products, color laser, solid ink and monochrome laser desktop printers, digital and light-lens copiers under 90 pages per minute, and facsimile products sold through direct and indirect sales channels in North America and Europe. The Office market...

  • Page 64
    ... 2001, respectively. 3 Depreciation and amortization expense is recorded in cost of sales, research and development expenses and selling, administrative and general expenses and is included in the segment profit (loss) above. This information is not identified and reported separately to our chief...

  • Page 65
    ..., 2001 and 2000, respectively. 3 Depreciation and amortization expense is recorded in cost of sales, research and development expenses and selling, administrative and general expenses and is included in the segment profit (loss) above. This information is not identified and reported separately to...

  • Page 66
    ... Land, buildings and equipment, net, (ii) On lease equipment, net, and (iii) Internal and external-use capitalized software costs, net. Note 10 - Net Investment in Discontinued Operations Our net investment in discontinued operations is included in the Consolidated Balance Sheets in Other long-term...

  • Page 67
    ...Rates at Interest Rates at December 31, December 31, 2002 2001 Notes payable Euro secured borrowing Total short-term debt Current maturities of long-term debt Total 6.22% 3.27% 11.07% -% $ Xerox Corporation (parent company) Guaranteed ESOP notes due 2001-2003 Notes due 2002 Notes due 2003 Notes due...

  • Page 68
    ... a $10 letter of credit under the subfacility. Xerox, the parent company, is currently, and expects to remain, the borrower of all the loans. The Revolving Facility is available, without sub-limit, to Xerox and to certain subsidiaries including Xerox Canada Capital Limited, Xerox Capital Europe plc...

  • Page 69
    ...(Europe) plc (XCE) (none at December 31, 2002) are also secured by all XCE's assets and are guaranteed on an unsecured basis by certain foreign subsidiaries that directly or indirectly own all the outstanding stock of XCE. Revolving loans outstanding from time to time to Xerox Canada Capital Limited...

  • Page 70
    ... rates and interest rates that could affect our results of operations and financial condition. Our current below investment-grade credit ratings effectively constrain our ability to fully use derivative contracts as part of our risk management strategy described below, especially with respect to...

  • Page 71
    ... the underlying assets and liabilities. We also utilize currency derivatives to hedge anticipated transactions, primarily forecasted purchases of foreign-sourced inventory and foreign currency lease, interest and other payments. These contracts generally mature in six months or less. Although these...

  • Page 72
    .... During 2001, $18 of net aftertax gains related to hedges of our net investments in Xerox Brazil and Fuji Xerox were recorded in the cumulative translation adjustments account. The amounts recorded during 2002 were less than $1. Fair Value of Financial Instruments: The estimated fair values of our...

  • Page 73
    ... theoretical net premium or discount we would pay or receive to retire all debt at such date. We have no plans to retire significant portions of our debt prior to scheduled maturity. Note 13 - Employee Benefit Plans We sponsor numerous pension and other post-retirement benefit plans, primarily...

  • Page 74
    ... Total and interest credits during an employee's work life, or (iii) the individual account balance from the Company's prior defined contribution plan (Transitional Retirement Account or TRA). Pension Benefits 2001 2000 2002 Other Benefits 2001 2000 $ 180 (210) 134 7 3 (1) 55 168 27 10 $ 205...

  • Page 75
    ... reported net income in arriving at net income available to common shareholders. Information relating to the ESOP trust for the three years ended December 31, 2002 follows: 2002 Interest on ESOP Borrowings Dividends declared on Convertible Preferred Stock Cash contribution to the ESOP Compensation...

  • Page 76
    ... any action that would precipitate the payment of income taxes thereon. It is not practicable to estimate the amount of additional tax that might be payable on the foreign earnings. As a result of the March 31, 2001 disposition of one-half of our ownership interest in Fuji Xerox, the investment no...

  • Page 77
    ...of IRS regulations issued in 2002, some portion of the losses may now be claimed subject to certain limitations. We have filed amended tax returns for 1995 through 1998 reporting $1.2 billion of additional capital losses. As of December 31, 2002, we have $425 of capital gains available to be offset...

  • Page 78
    ... customer. The agreements generally extend over a period equivalent to the lease term or the expected useful life under a cash sale. The service agreements involve the payment of fees in return for our performance of repairs and maintenance. As a consequence, we do not have any significant product...

  • Page 79
    ... fraud and deceit on purchasers of the Company's common stock and bonds by disseminating materially false and misleading statements and/or concealing material adverse facts relating to various of the Company's accounting and reporting practices and financial condition. The plaintiffs further allege...

  • Page 80
    ...RIGP: A class was certified in an action originally filed in the United States District Court for the Southern District of Illinois on July 25, 2000 against the Company's Retirement Income Guarantee Plan ("RIGP"). The RIGP represents the primary U.S. pension plan for salaried employees. Plaintiffs...

  • Page 81
    ... individuals or groups of individuals during the proposed class period: the Plan Administrator, the Board of Directors, the Fiduciary Investment Review Committee, the Joint Administrative Board, the Finance Committee of the Board of Directors, and the Treasurer. The complaint claims that all...

  • Page 82
    ... of contract and breach of fiduciary duty against KPMG. Additionally, plaintiffs claim that KPMG is liable to Xerox for contribution, based on KPMG's share of the responsibility for any injuries or damages for which 80 Xerox is held liable to plaintiffs in related pending securities class action...

  • Page 83
    ... loyalty by disguising the true operating performance of the Company through improper undisclosed accounting mechanisms between 1997 and 2000. The complaint alleges that the defendants benefited personally, through compensation and the sale of company stock, and either participated in or approved...

  • Page 84
    ... of Income. Under the terms of the settlement, in 2001 we restated our financial statements for the years 1997 through 2000. As part of the settlement, a special committee of our Board of Directors has retained Michael H. Sutton, former Chief Accountant of the SEC, as an independent consultant...

  • Page 85
    ... takeover tactics and to prevent a person or persons from gaining control of us without offering a fair price to all shareholders. Under the terms of the plan, one-half of one preferred stock purchase right ("Right") accompanies each share of outstanding common stock. Each full Right entitles the...

  • Page 86
    ... consists of common stock, investors will receive such common stock at a value of 95 percent of its then prevailing market price. Capital II may redeem all, but not part, of the Trust Preferred Securities for cash, prior to December 4, 2004, only if specified changes in tax and investment law occur...

  • Page 87
    ... shares. Compensation expense for restricted grants is based upon the grant date market price and is recorded over the vesting period which on average ranges from one to three years. Compensation expense recorded for restricted grants was $17, $15 and $18 in 2002, 2001 and 2000, respectively. Stock...

  • Page 88
    ...: 2002 PerShare Amount (Loss) Income 2001 PerShare Shares Amount 2000 Per(Loss) Share Income Shares Amount (Shares in thousands) Basic EPS Net income (loss) before cumulative effect of change in accounting principle Accrued dividends on preferred stock, net Basic EPS before cumulative effect of...

  • Page 89
    ... Statements of Income For the Year Ended December 31, 2002 Parent Company Revenues Sales Service, outsourcing and rentals Finance income Intercompany revenues Total Revenues Costs and Expenses Cost of sales Cost of service, outsourcing and rentals Equipment financing interest Intercompany cost...

  • Page 90
    ...2002 Parent Company Assets Cash and cash equivalents Accounts receivable, net Billed portion of finance receivables, net Finance receivables, net Inventories Other current assets Total Current Assets Finance receivables, due after one year, net Equipment on operating leases, net Land, buildings and...

  • Page 91
    ... Statements of Income For the Year Ended December 31, 2001 Parent Company Revenues Sales Service, outsourcing and rentals Finance income Intercompany revenues Total Revenues Costs and Expenses Cost of sales Cost of service, outsourcing and rentals Equipment financing interest Intercompany cost...

  • Page 92
    ...2001 Parent Company Assets Cash and cash equivalents Accounts receivable, net Billed portion of finance receivables, net Finance receivables, net Inventories Other current assets Total Current Assets Finance receivables, due after one year, net Equipment on operating leases, net Land, buildings and...

  • Page 93
    ... Consolidating Statements of Cash Flows For the Year Ending December 31, 2001 Parent Company Net cash provided by (used in) operating activities Net cash (used in) provided by investing activities Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash...

  • Page 94
    ... Statements of Income For the Year Ended December 31, 2000 Parent Company Revenues Sales Service, outsourcing and rentals Finance income Intercompany revenues Total Revenues Costs and Expenses Cost of sales Cost of service, outsourcing and rentals Equipment financing interest Intercompany cost...

  • Page 95
    ... with generally accepted accounting principles. This structure includes the hiring and training of qualified people, written accounting and control policies and procedures, clearly drawn lines of accountability and delegations of authority. In a business ethics policy that is communicated annually...

  • Page 96
    ... due to rounding, or in the case of diluted earnings per share, because securities that are anti-dilutive in certain quarters may not be anti-dilutive on a full-year basis. 4 Costs and expenses for the first quarter of 2001 included gains on the sale of half our interest in Fuji Xerox of $769. 94

  • Page 97
    ... per common share Year-end common stock market price Employees at year-end Gross margin Sales gross margin Service, outsourcing, and rentals gross margin Finance gross margin Working capital Current ratio Cost of additions to land, buildings and equipment Depreciation on buildings and equipment 2002...

  • Page 98
    ... I, Lawrence A. Zimmerman, Senior Vice President and Chief Financial Officer, certify that: 1. I have reviewed this Annual Report on Form 10-K of Xerox Corporation; 2. Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material...

  • Page 99
    ...Relations [email protected] Dividends Paid to Shareholders At its July 9, 2001 meeting, the Company's Board of Directors eliminated the dividend on the common stock. Previously, at its October 9, 2000 and February 5, 2001 meetings, the Board declared a dividend of $0.05 per share payable...

  • Page 100
    Xerox Corporation 800 Long Ridge Road PO Box 1600 Stamford, CT 06904 www.xerox.com 2980-AR-02