Xerox 2003 Annual Report Download - page 26

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24
recognize a material accrual, or should any of these
matters result in a final adverse judgment or be settled
for significant amounts, they could have a material
adverse effect on our results of operations, cash flows
and financial position in the period or periods in which
such change in determination, judgment or settlement
occurs. In 2003, we recorded a charge of $239 million
reflecting the court approved settlement of the Berger
pension related litigation.
Summary of Results:
Our reportable segments are consistent with how we
manage the business and view the markets we serve.
Our reportable segments are Production, Office, DMO
and Other. Our offerings include hardware, services,
solutions and consumable supplies. The Production
segment includes black and white products which oper-
ate at speeds over 90 pages per minute and color prod-
ucts over 40 pages per minute. Products include the
DocuTech, DocuPrint, Xerox 1010 and Xerox 2101 and
DocuColor families, as well as older technology light-
lens products. The Office segment includes black and
white products which operate at speeds up to 90 pages
per minute and color devices which operate at speeds
up to 40 pages per minute. Products include our family
of Document Centre digital multifunction products
which were expanded to include our new suite of
CopyCentre, WorkCentre, and WorkCentre Pro digital
multifunction systems, DocuColor multifunction prod-
ucts, color laser, solid ink and monochrome laser desk-
top printers, digital and light-lens copiers and facsimile
products. The DMO segment includes our operations in
Latin America, the Middle East, India, Eurasia, Russia
and Africa. This segment includes sales of products that
are typical to the Production and Office segments; how-
ever, management serves and evaluates these markets
on an aggregate geographic basis, rather than on a
product basis. The segment classified as Other, includes
several units, none of which met the thresholds for sep-
arate segment reporting. This group includes Xerox
Supplies Group (predominantly paper), SOHO, Xerox
Engineering Systems (“XES”), Xerox Technology
Enterprises and consulting services, royalty and license
revenues. Other segment profit (loss) includes the oper-
ating results from these entities, other less significant
businesses, our equity income from Fuji Xerox, and
certain costs which have not been allocated to the
Production, Office and DMO segments including non-
financing interest and other corporate costs.
Revenues:
Revenues by segment for the years ended 2003, 2002
and 2001 were as follows:
Equipment Sales:
2003 Equipment sales of $4.3 billion increased 7 per-
cent from 2002, reflecting significant growth in DMO,
the success of numerous new product introductions
and a 6-percentage point benefit from currency. In
2003, approximately 50 percent of equipment sales
were generated from products launched in the previ-
ous two years. Color equipment sales represented
28 percent of total equipment sales compared with
24 percent in 2002. 2002 equipment sales of $4.0 bil-
lion declined 10 percent from 2001, including a one
percentage point benefit from currency, as continued
economic weakness and competitive pressures more
than offset the successful impact of new products, most
of which were launched in the second half of 2002.
Production: 2003 equipment sales grew 9 percent from
2002, as improved product mix, installation growth and
favorable currency of 7 percent more than offset price
declines of approximately 5 percent. Strong 2003
production color equipment sales growth reflected
increased installations and stronger product mix driven
by the DocuColor 6060 and DocuColor iGen3 products.
(in millions) Production Office DMO Other Total
2003
Equipment sales $1,201 $2,452 $ 425 $ 172 $ 4,250
Post sale and other revenue 2,970 4,656 1,182 1,646 10,454
Finance income 376 595 9 17 997
Total Revenue $4,547 $7,703 $1,616 $1,835 $15,701
2002
Equipment sales $1,100 $2,336 $ 334 $ 200 $ 3,970
Post sale and other revenue 3,028 4,604 1,408 1,839 10,879
Finance income 394 601 16 (11) 1,000
Total Revenue $4,522 $7,541 $1,758 $2,028 $15,849
2001
Equipment sales $1,196 $2,458 $ 321 $ 428 $ 4,403
Post sale and other revenue 3,092 4,898 1,679 1,807 11,476
Finance income 439 661 26 3 1,129
Total Revenue $4,727 $8,017 $2,026 $2,238 $17,008